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Vat & service tax on flats in bangalore

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Querist : Anonymous

Querist : Anonymous (Querist)

14 April 2014 I have registered a flat(1510 sqft) for Rs.45.50 lacs(puchase value) for which guidline value is Rs38,19,300. Builder has charged me additional amount of Rs.218,118/- for the same.

The builder has given the following explanation:
Diference between Regn & guildline vlaue Rs.730,700
VAT @14.5% 105,894
Servie Tax @12.36% 90,315
eligibility of Income tax @30% =219,090 - 10% of 219,090 is 21,909
Total amount collected 218,118.

I am not convinced from the above.

Flat is registered on 1st February 2014 and construction is completed n possession was given on 16 March 2014.

Please confirm whether the above additional amount collected by is correct and legal?

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

14 April 2014 Ask for break up of the total amount charged which also includes VAT and ST. Then you can know whether the amount charged now is correct.The amount of Rs7,30,700- in excess of gidance value is generally not declared to the govt by the builders.Hence no vat or st should be charged on it.Also charging 30% IT is unnecessary.....mjk

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