cpc

vat before 1 apr 2010


ir there was a news on saturday that the maharashtra goverment had directed the prompters to pay VAT on sale of flat from June2006 till Mar'2010.

Further the article reflects the rate of VAT @ 5% in daily sakal and 2.5 to 3% in times of india, for registration upto Mar'2010.

And the rate of VAT is 1% from April 2010.
Kindly suggest as I have registered my flat in Mar 2010 at what rate I shall pay VAT to the developer as it is my liability
Further I have not received the possession of the flat.

At the time agreement I paid 3.5 lakh and the rest 19 lakh paid after april 2010.

 
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Chartered Accountant

 

prior to 1.4.2010 the VAT in maharastra was 5% excluding cost of Land from 1.4.2010 it brought down to 1% including cost of land. 2.5% - 3% i believe that must be a rate of Service Tax. Most of the people get confused with both the terms.

for more clarity read

http://www.caclubindia.com/articles/service-tax-and-vat-on-under-construction-flat-unit-14745.asp

 

read

 
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I am not fully satisfy by your answer because the builder already paid VAT on material, so this amount should debeted from VAT from VAT or not.

You give me a calculation hou much I paid . 

 
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Hello Sir, 

I have paid whole amount for my flat and when i am suppose to get the Possessionof my flat builder is asking for 5% MVAT which he never informed. Now i see a lot of new in the papers and all mentioning the onus is on builder to pay this and not the buyer and also the MVAT should be less that 3%.

On reading this i had written back to him as to why should i be paying the MVAt and secondly it should be less than 3%. He responded to my email as below and also sent me a letter asking me to pay MVAT within 15days or else he will add up intrest and penalty.

==================

MVAT Provisions applicable to agreements for sale of flats registered upto 31.3.2010:  As per provisions of Section 42(3) of the MVAT Act, the dealer is liable to pay tax on the sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lump-sum by way of composition  equal to five per cent of the total contract value of the works contract in the case of a construction contract after deducting from the total contract value of the works contract, the amount payable towards sub-contract involving goods to a registered sub-contractor.

 

Construction contracts have been notified in Notification no.VAT-1506/CR-134/Taxation-1 dated 30th November 2006. Thus there are no deductions specified in the Act towards cost of land, etc... in case of composition scheme of tax payment (Section 42(3)) applicable in case of Construction contracts.  

 

MVAT on sale of flats can be computed by following provisions of Rule 58(1A) of the MVAT Rules, wherein deductions towards cost of land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable  on the 1st January of the year in which the agreement to sell the property is registered: Provided that, deduction towards cost of land shall not exceed 70% of the agreement value (maximum permissible deduction limit). The balance after claiming deductions as prescribed in the Rules shall be value of goods relating to transfer of property in goods liable to tax at regular rates (5% or 12.5%). 

 

These are two methods for VAT liability determination in case of Construction Contracts: 1) Under Section 42(3) of the MVAT Act, 2002 (w.e.f 20.6.2006)  & 2) Under Rule 58 (1A) of MVAT Rules,2005.  The Company has decided to determine MVAT liability by following provisions of Section 42(3) of the MVAT Act, 2002.

================================

Now after readin the above i do not understand if he is correct and my questions as below

1. Should i be paying him the MVAT when things are not yet clear? So much going in the paper daily , no clarity?

2. Is he calculating the MVAT correctly?

3. If i dont pay him the MVAT within 15days can he ask us to pay interest and penalty?

with best regards

Jay

 

 

 

 

"MVAT Provisions applicable to agreements for sale of flats registered upto 31.3.2010: As per provisions of Section 42(3) of the MVAT Act, the dealer is liable to pay tax on the sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lump-sum by way of composition equal to five per cent of the total contract value of the works contract in the case of a construction contract after deducting from the total contract value of the works contract, the amount payable towards sub-contract involving goods to a registered sub-contractor. Construction contracts have been notified in Notification no.VAT-1506/CR-134/Taxation-1 dated 30th November 2006. Thus there are no deductions specified in the Act towards cost of land, etc... in case of composition scheme of tax payment (Section 42(3)) applicable in case of Construction contracts. MVAT on sale of flats can be computed by following provisions of Rule 58(1A) of the MVAT Rules, wherein deductions towards cost of land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the 1st January of the year in which the agreement to sell the property is registered: Provided that, deduction towards cost of land shall not exceed 70% of the agreement value (maximum permissible deduction limit). The balance after claiming deductions as prescribed in the Rules shall be value of goods relating to transfer of property in goods liable to tax at regular rates (5% or 12.5%). These are two methods for VAT liability determination in case of Construction Contracts: 1) Under Section 42(3) of the MVAT Act, 2002 (w.e.f 20.6.2006) & 2) Under Rule 58 (1A) of MVAT Rules,2005. The Company has decided to determine MVAT liability by following provisions of Section 42(3) of the MVAT Act, 2002. ============================== Now after readin the above i could not understand anything. Do you have any idea about the Section 42(3) of the MVAT Act, 2002.? Do you still feel i should get a lawyer or go to consumer court?

Read more at: http://www.caclubindia.com/experts/experts_profile.asp?member_id=411426
"MVAT Provisions applicable to agreements for sale of flats registered upto 31.3.2010: As per provisions of Section 42(3) of the MVAT Act, the dealer is liable to pay tax on the sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lump-sum by way of composition equal to five per cent of the total contract value of the works contract in the case of a construction contract after deducting from the total contract value of the works contract, the amount payable towards sub-contract involving goods to a registered sub-contractor. Construction contracts have been notified in Notification no.VAT-1506/CR-134/Taxation-1 dated 30th November 2006. Thus there are no deductions specified in the Act towards cost of land, etc... in case of composition scheme of tax payment (Section 42(3)) applicable in case of Construction contracts. MVAT on sale of flats can be computed by following provisions of Rule 58(1A) of the MVAT Rules, wherein deductions towards cost of land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the 1st January of the year in which the agreement to sell the property is registered: Provided that, deduction towards cost of land shall not exceed 70% of the agreement value (maximum permissible deduction limit). The balance after claiming deductions as prescribed in the Rules shall be value of goods relating to transfer of property in goods liable to tax at regular rates (5% or 12.5%). These are two methods for VAT liability determination in case of Construction Contracts: 1) Under Section 42(3) of the MVAT Act, 2002 (w.e.f 20.6.2006) & 2) Under Rule 58 (1A) of MVAT Rules,2005. The Company has decided to determine MVAT liability by following provisions of Section 42(3) of the MVAT Act, 2002. ============================== Now after readin the above i could not understand anything. Do you have any idea about the Section 42(3) of the MVAT Act, 2002.? Do you still feel i should get a lawyer or go to consumer court?

Read more at: http://www.caclubindia.com/experts/experts_profile.asp?member_id=411426

 
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