vat applicable on construction activities

This query is : Resolved

altaf peeran (Querist)
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14 March 2009 hi
my client have started a redevlopment project in mumbai- maharastra, werein they will be constructing 14 storied residential cum commercial building as such the ground floor will b commercial and 1st to 7th floor would be given to existing members and 8 to 14 floors they will be selling, now they are constructing the entire bldg on their own, hence would like to have clarification on the following.

a) Is VAT registration required?
b) If yes what are the advantages they can get.
c) Can they procure material for constrcution against C form , can they get the benefit.
d) what would be their VAT liability are they require to collect VAt from Client.
as such they have just started the constrcution activity a month ago.

CA. MITHUN KHATRY

CA. MITHUN KHATRY (Expert)
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14 March 2009 in k raheja developers corporation case SC held that in case construction is carried out on property of some other person then it is WCT chageable to vat.

you may read full particualrs of the case.

in your case as per limited information avaialbe
a. VAT registration is required.
b. builder may take advantae of input credit.
c. yes.
d. vat liablity woud be WCT Payable.

its upon mutual agreement, who pays WCT.

advice : purchase land from the owners.
build complex on it
sell units to previous owners.
do not make prior aggrement to sell units to previous owner.

in this way liability to vat will be nil.

send me details on khatrimithun@gmail.com for clarifications in detail.

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