Vat on constructed and oc received flat

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Dear sir, I have bought a flat which was totally constructed and occupancy certificate was issued for the block in the project on which my flat belongs . When I booked my flat almost more than 50% of flats, the residents have occupied and were living. My payment terms clearly shows under VAT column 0 amount. I paid for total value, finished my registration, received my possession certificate also started living in it for past 6 months. Now my builder is saying he paid VAT on my behalf and is asking me to pay the amount. I have checked in various forums and clearly says that there is no VAT for buyers who bought a constructed flat and for which OC was obtained before buying the flat. The builder is falsely claiming. Please advise me. I purchased the flat thinking there is no VAT. I bought this flat by applying bank loan and now this additional claim by builder is huge and builder is definitely deceiving us. Regards Chitra prakash 9100382460
Replies (1)

Goods are defined to include moveable properties. Hence, sale of a constructed unit, which is an immovable property, will not qualify as goods and accordingly will not attract VAT.
The Supreme Court, in the judgement of Larsen and Toubro, while confirming the levy of VAT on agreements for sale of under-construction units, stated that when an intending purchaser books a flat before completion of construction, the construction made by the developer can be said to have been executed under a works contract with the purchaser. However, when a flat is sold after construction, there is no works contract and it is a sale of immovable property, hence no VAT is applicable.
Vat on transaction for sale of flat effected after he has secured completion certificate for the project from the municipal corporation.

 

 


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