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Vat on purchase of flat

Himanshu Joshi (Accountant) (42 Points)

13 June 2016

Respected Sir / Madam

I am purchasing a flat in MP please let me know that is there VAT applicable on Purchase of

Flat or not

And Secondly as I was in Construction co we were not charging VAT because the Tax imposed by the Govt was challenged in court

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2 Replies

poonam (Student) (54 Points)
Replied 13 June 2016

Hiii Himanshu,

According to a recent verdict by the Supreme Court, the sale of a property that is under construction would be liable to value-added tax (VAT).

The ruling could have far-reaching ramifications for the real estate industry as well as property buyers. In the case of L&T versus State of Karnataka, the apex court held that the pre-construction agreements for sale of immovable property would qualify as 'works contract' and, therefore, VAT would be payable on the transaction.