Re: VAT and Service Tax for flats in Andhra Pradesh
1.) Stamp Duty varies from state to state. In AP it is 9.5% of the market value which is registered in the sale deed. Stamp Duty is further broken into:
a. Stamp Duty - 7%
b. Registration Fee - 0.5%
c. TPT(Transfer of Property Title) - 2%
2.) there are different situations under which VAT is applicable, though i'm not an authority on these matter but my personal experience made me learn the hard way. Basically if ur dealer(builder) is registered with the Commercial Taxes Dept and opted to pay VAT under composition scheme then there are 4 different slabs as follows:
1. at the rate of 4% on the total value of the contract executed for the government or local authority subject to such conditions as may be prescribed.
2. at the rate of 4% on 50% of the total consideration received or receivable for the contract other than state govt and local authorities subject to such conditions as may be prescribed.
3. at the rate of 4% of 25% of the total consideration received or receivable or the market value fixed for the purpose of stamp duty whichever is higher, for the contract of constructing
and selling of residential apartments, houses, buildings or commercial complexes subject to such conditions as may be prescribed.
4.at the rate of 12.5% on 60% of the total consideration charge for food and drink to such conditions as may be prescribed.
So based on the above, I feel that you are entitled to pay 1% VAT i.e., 4% of 25% of the total considered value. Normally 1% VAT is calculated and collected at the time of Registering Sale Deed, unless in situation where the builder's turnover is more (some figure is prescribed, cant remember it though), where he needs to be registered with the Commercial Taxes Dept. that's when the above 4 points come into picture.
3.) Service Tax would be 4.12% of the total considered value. I think sometime back a circular was issued by the service tax department Circular No. 108/02/2009 . I think there will be a lot of issues that need to be sorted with ur builder as they try to FLEECE the gullible prospective buyers.
So beware when you talk or deal with them and if ur a good negotiator then u can knock of these taxes, especially since the recession is going on.
I have bought a flat in Pune in 2008. The agreement has been registered in 2008 itself.
Not at the time of possession, the builder is demanding a post dated cheque
for VAT and service tax.
Can he ask for this even though it is not applicable to me.
see letter from the builder's office below
This is to inform you that effective 1st April 2010 tax department of Government of India has implemented VAT on all Sales Agreement done on or after 1st April 2010.
This Vat is calculated at 1% of Agreement Value.
Kindly comply with the same & send us a cheque payable to “Mont Vert Associates” in amount of 1% of your Agreement Value.
Is VAT & Service tax applicable in Wagholi, Pune for purchase of flat
Hello, I had purchased & registered a flat in Wagholi, Pune in August 2010. On request of builder for VAT & Service tax, I had issued him two cheques. Till date, it was not credited to the builder account. Yesterday, I had got the message that he will deposit the cheque on 10th December 2010.
Please support me whether VAT & Service tax is applicable to me or not.