Real Estate

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Deepak Garg

Deepak Garg (Querist)
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02 August 2010 Is sale purchase of real estate is covered under the category of Delhi VAT

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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02 August 2010 VAT is related to manufacturing of goods. Hence it is not related to real estate

Deepak Garg

Deepak Garg (Querist)
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02 August 2010 My dear friend. VAT is related to sale purchse of goods not on manufacturing of goods..

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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02 August 2010 VAT, in simple terms, is a multi-point levy on each of the entities in the supply chain with the facility of set-off of input tax - that is, the tax paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each of the entities is subject to tax. For instance, if a dealer purchases goods for Rs 100 from another dealer and a tax of Rs 10 has been charged in the bill, and he sells the goods for Rs 120 on which the dealer will charge a tax of Rs 12 at 10 per cent, the tax payable by the dealer will be only Rs 2, being the difference between the tax collected of Rs 12 and tax already paid on purchases of Rs 10. Thus, the dealer has paid tax at 10 per cent on Rs 20 being the value addition in his hands.

Purchase price - Rs 100
Tax paid on purchase - Rs 10 (input tax)
Sale price - Rs 120
Tax payable on sale price - Rs 12 (output tax)
Input tax credit - Rs 10
VAT payable - Rs 2

Deepak Garg

Deepak Garg (Querist)
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02 August 2010 yes you are absolutely right.. your process is right how can u conclude with it that VAT is chargeable on manufacturing of goods.

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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02 August 2010 For imposing VAT there is one condition i.e. there should be value addition. If there is no value addition then there is no VAT. Generally value addition is possible by using manufacturing process.

Deepak Garg

Deepak Garg (Querist)
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02 August 2010 No, its not . if a person adds any profit in any goods then it is also termed as value addition.

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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02 August 2010 yes agree with you.

Deepak Garg

Deepak Garg (Querist)
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02 August 2010 Left it ... tell me do u know abt chargeability of DVAT on real estate.

Deepak Garg

Deepak Garg (Querist)
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02 August 2010 tell if possible..

VINOD ARORA

VINOD ARORA (Expert)
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02 August 2010 As of now, there is no charge of DVAT on real estate transactions, except for work contracts.

Further, for your kind info, If you are planning to buy a house worth more than Rs 50 lakh, get ready to shell out more money as the Delhi government is planning to impose value added tax (VAT) @1% on all property transactions above Rs 50 lakh, on similar lines as followed by MahaVAT.

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