Mvat

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radha (Querist)
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17 November 2014 Is MVat @ 1% applicable on electricity, water charges, society formation charges etc that the builder charges from the flatowner over and above the consideration/ agreement amount?
Am I as a flatowner liable? If yes, can I claim credit for it? If Yes, What document should I ask the builder to furnish me with?
In the trade circular it is mentioned that these expenses will be allowed as a deduction to the builder if they are paid to the authorities. If the builder is getting a deduction from his MVat isn't he duty bound to transfer the credit to me.
A swift reply would be highly appreciated.

Ankit

Ankit (Expert)
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17 November 2014 Dear Radha,

Ideally you are not supposed to pay the VAT on the electricity charges etc. The allowability of the deduction is to the builder and not to the flat purchaser. Thus, you have to pay the VAT only on the consideration for the Flat and not the total amount. Also, you can argue with him, saying that VAT is charged on the sale of goods and society formation charges is not goods as such.

If there is anything else, let me know

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radha

radha (Querist)
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17 November 2014 Could you please give me the relevant section /circular/notification with which i can argue with them?

radha

radha (Querist)
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17 November 2014 But on legal charges and society formation charges he is charging vat as well as service tax

Ankit

Ankit (Expert)
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17 November 2014 There is a file that I have on this, which explains everything....if you want, I can mail the same to you

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