Regarding 5% vat demand.

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2012 I had registered property in Dec-2009, in Navi Mumbai for the agreement value of 4350000/-.
Now the OC is received in March-2012.Now the builder is asking me to pay 5% Vat of the agreement
value i.e Rs.217500/- which was mentioned no where in my agreement.Although he has already taken
the service tax from me in March 2012 at the rate of 2.5% or more may be to the tune of Rs.64000/-
Now Iam very tensed since the agreement states that "any other taxes,ceases that shall be leivied or
become leviable by CIDCO/NMMC or any GOVt.authorities and also such other charges,
esclations imposed by CIDCO or any other Govt. authorities to be paid by the purchaser".Also it states that,"If at
any time any Service Tax or WTC or other levy or charges is or are levied charged or sought by any authority in the
respect of the said Agreement, the same shall be borne and paid by the purchaser."
Now since I have registered the prop. before 1st April 2010, how can he ask me to pay the VAT of 5%.He is not
giving me the possession letter and the allotment letter for parking.What would you suggest me in this case.
Request you kindly help urgently.

Manoop V M

Manoop V M (Querist)
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06 June 2012 Dear Experts,

Could you pls explain when luxury tax is applicable in Kerala for sale of residential houses...
Is it if area exceeds 3000 sq feet...?

thanks for reply,,,

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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06 June 2012 Mr Author,
No doubt,VAT is payable on the apartment cost @5%(composiotion rate) and ST @2.5%(comp rate). The amount charged to you includes land cost(upto 40% of total value),and charges for ..club facilities,security,parking etc.Some times these charges add up to 50% of the cost and are not chargeable with VAT.Find out whether the builder is registered under MVAT Act and he has filed returns paying the composition tax @5%.If he is paying tax under VAT scheme it comes to around 3% only,after having input tax set off and exemption on labour and expenses and also after making the above deductions.Check up all these points before you make any payment and ask for a receipt for such tax payments,so that you may verify with the VAT department....MJK

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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06 June 2012 Mr Manoop,
I do not think there is any luxury tax on sale of houses in Kerala.Luxury tax is leviable only,hotel charges,home stay,kalyanamandapam,luxury boats and cable operators only....MJK