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190 Points
Joined August 2013
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.