Real Estate India: How much VAT should be paid?
Question asked by Mr Moorthi Subramaniyan from Bangalore: Hi Vatsala, I am Moorthi, recently I got registered my flat in a small apartment (it has 12 flats) in Bangalore. My agreement with builder is Rs. 9L for land cost & Rs. 21L for construction (including electricity, water, registration etc). My question is, How much VAT I need to pay (based on 4%)? Can you help me on this? Regards Mr. Moorthi Subramaniyan Bangalore Vatsala Answers: Service tax will not be attracted for a complex where the total number of Apartments is 12. Regarding the VAT liability, it may not be payable on the entire amount of Rs.21 lacs. Definitely the amounts charged towards cost of registration and obtaining electricity and water connection should qualify for abatement. On the balance amount, the builder has two options for collecting VAT, viz., either the compounding option or the actual value option. If he prefers compounding option then the VAT is payable on the balance amount at 4% in Karnataka. If th...