Need to know vat liability flat was booked as near posession

   Mr Dhiraj,

  As per some Supreme Court rulings any booking made or contract entered to buy a

flat before its completion becomes a works contract and VAT liability arises. A builder

generally includes items such as 1) construction cost 2) land cost 3) cost charges pay-

ble to statutory bodies for registration connection of electricity,water,sewage,cable etc

4) cost of amenities provided in the form of club,sports,swimming pool,park,security,

lift, 24X7 water supply etc. Among these only the first item is liable for VAT. 5% on the

whole construction value or 12.5% on the material part of it. Land cost is generally 40%

and other items are nearly 20% of the total flat value shown in the agreement.For

collecting VAT th builer should be registered and issue a tax invoice.........MJK