Karnataka VAT

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Uma (Querist)

20 July 2009 Hello Sir, Madam,

I am in the process of buying a residential flat in Bangalore. The proje ct is under construction and the posession will be in Dec 2010. My query is 'Whether kvat is applicable to the cost? if yes, what is the percentage. Further, is Service tax applicable?

Thankyou for your time.

Regards
Uma

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

20 July 2009 If there is a single agreement for sale of immovable property then no VAT.
If 2 agreements then on the construction part either composition without set off of input VAT paid for cemment steel etc. Or regular scheme 12.5 % on 70% of the construction contract. IN this case credit of steel , cement available. Net cost to the contractor wouldbe 2-3%.

Uma

Uma (Querist)

27 July 2009 Thankyou Sir, for your time in responding to my query. My flat ventures have given the following breakdown saying that their's is a Composition Scheme. Is this valid. Is negotiation possible in any of the factor?

------------- Value of Invoice----- KVAT @ 12.5%

Construction--- 3573120 -------- 312648
Cost of Flat

Cost of Terrace--- 0 --------- 0
Reserved Car-----225000 --------- 19688
Parking

Water Charges----130270 --------- 13841

Electricity ---- 130270 --------- 12213
Charges

Piped Cooking-----20000 -------- 1875
Gas Charges

Com. Areas ------ 25000 ---------- 2344
Generator Charge