I bought a flat in NOV- 2009 and paid the registered amount. This falls before march 2010. The agreement of sale provided by the builder does not involve any VAT mentioned. Am I still liable to pay the VAT? If yes, how much? The builder has also filed a civil case and is charging 2.17% of the price of the flat from all the owners. What can be done?

Answered on November 08, 2017

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In Maharashtra, VAT on sale of underconstructed property brought into effect from June 2006. Hence, builder would be liable to pay VAT on agreement to sale effected in Nov 2009. There are various methods for arriving at the taxable value of transfer of property in goods during construction. Liability to pay VAT by flat buyer to the builder would be dependent on the contractual arrangement between the parties. However, like any other indirect taxes, builder may shift the incidence of VAT on the flat buyer. Under the GST scenario, no composition scheme has been pronounced as in case of VAT legislation. Hence, GST shall be leviable at applicable rate (currently 12%, in case consideration is inclusive of transfer of property in land)