The Government of Maharashtra has introduced a Scheme of Composition of VAT (dated 9the July 2010 through notification) for registered dealers undertaking construction of flats and transferring them in pursuance of an agreement along with land or interest underlying the land. The VAT is payable @ 1% of
• the aggregate amount specified in the agreement or
• the value specified for the purpose of stamp duty in respect of the said agreement, whichever is higher
Question 1
Agreement provide for consideration of Rs 10,00,000/- per flat but excluding all expenses of stamp duty and registration fee, VAT, Service tax or any other taxes imposed by the government.
Then the VAT payable is
= 1% of (Rs 10,00,000/- i.e. net consideration)
Or
= 1% of (RS. 10,00,000/- Plus Stamp duty, registration fee etc i.e. gross consideration)
Question 2
The project involve 100 flats, out of which 95 agreement has been made, but no agreement for remaining 5 flat is made till completion of construction.
If agreement to sale is made after completion of construction whether the VAT is payable under this scheme of composition, or the composition scheme is not applicable in this case?
If the composition scheme is not applicable, then what options are available for payment of VAT.
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