Vat & service tax
Querist : Anonymous
i am working with pvt company in karnataka.now along with my freinds planning buy 18 cents land to construct 12 or 14 flats by aapointing good contractor.
i have few doubts with regard to tax implication on this .
1.as per my knowledge , we need to pay stamp duty only on purchase of land. request your confirmation.
2.kindly confirm whether VAT and service liablity will come to us ..if no.of flats 12 or 14.
3 . is it required to form society first then proceed with the plan.
4.Request your idea for this plan to execute in more better manner.
Thanks and Regards
Nagesh
Mangalore
When a person enters into a composite works contract involving both materials and labour, which cannot be easily bifurcated, VAT is Applicable on 67% of the contractors' bill and service tax on 33% of the contractors' bill.
On sale of the flats, service tax is applicable on the payments received from the buyers, whether as advance or otherwise, till the Completion Certificate is obtained from the municipal authorities. All considerations received thereafter will be free of service tax.
The sale agreement with the flat owners should be for a price inclusive of the pro-rata land value transferred to each flat owner.
The rate of service tax if the cost of each flat is below Rs.2 Crore and the area of each unit is less than 2000 sq.ft will be 3.09% of the sums received and if the above two conditions are not there then @ 3.708%.
The requirement to form a society is optional. A society is usually formed of all the prospective owners so that the transfer of property after completion is done smoothly and the promoter does not have to run in all directions to realize his dues.
Querist : Anonymous
Querist : Anonymous
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