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DEEPIKAA RAJPOOT (SALES HEAD)     14 October 2011

Vat registration for builder

A is a builder and making a highrise apartment by his own account  after this some of his client take loan on his project by a Private bank and cheques make in favor of builder.

according to "A" s tax consultant if builder take EPF from bank(make some flat finance) than vat will be applicable on all flats however he make finance on some flats only or  if builder not make any  finance  to any client than no vat will be applicable according to section .

our question is if builder make finance of some of flats than vat  should also applicable on some flats only?



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 3 Replies

R K JAIN (Advocate)     07 November 2011

If a builder construct the flat on behalf of the client then the VAT will be applicable otherwise VAT will not be applicable. The builder sale the flat before construction then the view of the court is that the flat is constructed on behalf of client. If the flat is sold after construction then there is no applicability of VAT.

DEEPIKAA RAJPOOT (SALES HEAD)     08 November 2011

Thanx for you are advice here one more question about finance process as well so please light on that pooint as well if you can. 

R K JAIN (Advocate)     10 November 2011

Registration for builder under VAT Act will be in the state where he is constructed the flats as per the provision laid down under the state act whether he wants under lump sum scheme or not. If he opts for lump sum sceheme then the fix rate on the contract value of construction part will be paid otherwise the goods used in the construction will be taxable.


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