Serive Tax & Vat Applicable on ready to move duplex with extra land in a township in Bhopal, MP

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  1. BABITA ROY

    BABITA ROY New Member

    I have paid all my dues after completion of the duplex. No work was pending till 3.11.2015. For completion Cetificate he will apply 'Completion Certificate' for the entire project not for the individual duplex.
     
  2. ZED

    ZED Well-Known Member

    Yes, completion project would be for the project but thats the best evidence I could obtain from you.

    You used the word *dues* . Confirm WHETHER ANYTHING WAS PAID PRIOR TO THIS letter Dated 03.11]

    IF NOT THEN THERE IS NO ST LIABILITY OR VAT LIABILITY
     
  3. BABITA ROY

    BABITA ROY New Member

    Asked for the completion certificate to the builder. But they denied as they need to take this certificate for the entire project and not for the individual duplex. But they should get Completion Certificate for the the perticular phase and then only issue the possession certificate and that they could sell & do registration, please clear.
     
  4. BABITA ROY

    BABITA ROY New Member

    before 3.11.15 only 12 lakh as booking amount paid
     
  5. ZED

    ZED Well-Known Member

    Although the builder is correct but he has not provided the info you asked.

    In a project consisting of multiple units , ST liability has to be determined for each such unit individually.
    [We have to check this construction point at every sale]

    On the basis of the discussion I believe that he DOES NOT HAS COMPLETION CERTIFICATE, which means your units were sold before completion of the building/Project and hence ST and VAT would apply in your case.

    "But they denied as they need to take this certificate for the entire project and not for the individual duplex. "

    You may confirm whether they have certificate or not


    If any of the units are sold after receiving the completion certificate then those units would not attract ST or VAT

    Suppose for eg the Project is for 40 Flats. Out of which 30 were SOLD/BOOKED before receiving the completion certificate (suppose Completion certificate was received today i.e 23/11/2015)
    and 10 Units are sold after 23/11/2015
    Then those 10 units wont attract ST or VAT, but the 30 units would attract both
     
  6. BABITA ROY

    BABITA ROY New Member

    can they sale before getting 'Completion Certificate". Can they issue ready for possession certificate? I have paid 1 lakh as booking and rest 11 lakh on 3rd nov. date of agreement.
     
  7. ZED

    ZED Well-Known Member

    Yes, sometimes its possible. A few years back my parents were considering a joint venture where a part of the land would of them and expense on construction would be borne by the builder. We were to get 2 flats. He said since some flats would be completed before and some would completed lateron, we can have unit from the early completed ones.

    There is difference in possession letter and ready to possession letter. The time gap between the actual possession in the 1st case would be minimum, could be in days, but the time gap in other would be much higher , weeks or even years. There a date will be mentioned and it will read that possession will be given on or by that [date [Year/Month] as the case maybe

    I will give you a realistic example from the google search

    READ, THEY SAY "READY FOR POSSESSION"
    AND NOW OBSERVE THE DATE OF POSSESSION
    [This is merely an example, nothing is being advertised or intended to be advertised]

    Capture.PNG
     
  8. BABITA ROY

    BABITA ROY New Member

    means i have to pay both taxes? duplex is on 1388 sq.ft. plot & 1364 sq.ft extra land is beside it. builder said land price is 1800/- per sq.ft. earlier price is 96 lakh after negotiation it comes 78 lakh. I think service tax is not applicable on land purchase. but he showed it as a one unit land + duplex. In agreement he put price of duplex 68 lakh & land price is 7.34 lakh. Is service tax & vat is levied on land purchase?
     
  9. ZED

    ZED Well-Known Member

    If they do not have the certificate then yes.

    Land is an integral part of the building. As per General Clause Act, immovable property includes land.

    But In your case the size of (unbuilt ) land is significant. The tax is on Service of construction. As such unbuilt land should not be exigible to VAT or ST but.....

    I wish to read the agreement before saying anything. Whether the agreement was separate or not?

    Further, you may obtain a second view if you were not satisfied with my opinon in respect of VAT & ST levy [No, issues]
     
  10. BABITA ROY

    BABITA ROY New Member

    Agreement is not separate but it is mentioned as I said above. U helped me a lot in clarifying the issue. Thank you so much. I dont know where to get second opinion. you please help as u r knowing everything.
     
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