KVAT
Uma
(Querist) 27 July 2009
This query is : Resolved
1.What is KVAT
2.My property dealer says his project incurs KVAT of 12.5% as it is in a Composition Scheme. However, another bulider says it should be 4% only. How can I validate his claim?
3. Is KVAT applicable on factors like following:
Construction Cost of Flat
Cost of Terrace
Reserved Car Parking
Water Charges
Electricity Charges
Piped Cooking Gas Charges
Com. Areas Generator Charge
Thankyou so much for your time in looking into this.
Regards
Uma
A V Vishal
(Expert) 27 July 2009
KVAT is Karnataka Value added Tax or in simple words it is sales tax.
The builder if following the composition method need not pay VAT at 12.5% but at a lesser rate viz.4% since he is not eligible to claim input tax on purchases made by him similarly if he is not opting for the composition scheme then he should pay it at 12.5%.
KVAT is applicable to all work contracts it means on all activity of construction carried by him for you, in my opinion terrace is a common area and all expenses should be apportioned between the flat owners. Similarly in case of Electricity, piped gas connection and comm area generator charges are amenities the benefit of which accrues to all. In my opinion, the builder can collect the VAT only on the construction of your dwelling unit and the reserved car parking.
