Why VAT on builders??

If they use their materials(cement,steel,electrical etc) they had to pay VAT on their deemed sale value by adding freight and Gross profit.

but main thing is that, Selling flat is immovable property. Maharashtra VAT Act, Clearly states that VAT is applicable on  the Movable Goods. hence basically Flat is Immovable property then Why to adopt Deeming provision of the Act or composition scheme. 

Eventhoug its immovable property it was constructed by movable things only.Hence every contractor,builder or construction companies have to pay VAT on the materials(movables) involved in the construction.If  it was  only a labour contract(materials given by the awardee) there is no liability of VAT.

They had to pay VAT on the materials at approriate rates or under composition tax on the total value of the contract .For the labour charges they had to pay service tax.

under works contract there should be proportion for service and materials used. and on materials used% vat should be payable.

If builder want to purcahse material out of the state under CST then they can allow

to get form C against purchase of material or they hav to pay full tax on purchase in the

case of builder using composit scheme and paying 1% on flat sale.