Vat on immovable property

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Curiosity (Querist)

11 June 2014 1) I'm buying a flat from an individual seller.

2) Seller has purchased flat & registered it on 21 -6-2011.

My query -
3) Am I liable to pay VAT at 1%?
Why I feel so is a PDF (mahavat.gov.in/Mahavat/MyFold/.../FAQ&NOTE(28-08-12).pdf) says the VAT is to be paid by developer, on a flat under construction. (page 4 of PDF has FAQ).

in the PDF, a question is -
'Q3. Whether VAT is payable on the sale of completed flat?
Ans 3:
VAT is not payable if a completed flat is sold by the developer'.

In my case -
-- the flat is expected to get OC by June end 2014 / july 2014.
-- My agreement expected to get registered before the OC is received.
So, will the flat be considered as 'flat under construction' and VAT at 1% levied on me? If yes, will it be based on the difference between my purchase value - minus - sellers agreement value with original builder?
Will the seller will get setoff?

There are some other Q&A in PDF, but I'm unable to understand, hence this question.
Thank you!

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

11 June 2014 As the construction of the building is not completed(without OC and completion certificate)liability of VAT and ST will arise. Some builders collect these taxes at the time of giving occupation.So,you may have to pay the full amount of taxes.The way open for you is to deduct the required amount of pro-rata taxes from the flat seller....mjk

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Curiosity

Curiosity (Querist)

12 June 2014 Resp. Shri. M. J. Krishnamurthy,

Thank you very much! It's a great help from you, and thanks to CA club as well!

-Uday Kanitkar

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