Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: cpt :: due date for vat payment :: VAT RATES :: empanelment :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: TDS :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: form 3cd
 
 
VAT (Value Added Tax) »
 15% rise in collectionof VAT for Oct-Nov
 China to simplify tax scheme after switch to VAT
 Cabinet clears key proposals on VAT, regularisation of jobs
 Cases of VAT overcharging flood consumer forum
 State seeks relief from Centre
 Flat rate VAT changes for small businesses explained
 Cenvat Credit Of Additional Duties Of Customs [Cvd] On Imported Coal
 Excise Dept puts VAT refund on fast track
 Consumer fora receive 18 VAT plaints
 Appointment of Assistant VATO - F.3(14)/Fin(Rev-I)2012-13/DSVI/334
 Bio-diesel body seeks VAT relaxation

VAT on flats may be less than what owners fear
September, 05th 2012

Here's some good news for flat owners worried how much Value-added tax (VAT) will they have to pay.

The quantum of Maharashtra VAT on flats and real estate sold in the state between June 20, 2006 and March 31, 2010 may be much less than 5%, depending up on the method of calculation a developer chooses to adopt.

For example, for a flat with an agreement value of Rs 30 lakh, the VAT could be Rs 24,500 at the lowest and Rs 1,15,800 at the highest.

Soon after the state government's communication, there was a general impression that purchasers will have to shell out a high 5% of the value of their deals as VAT. While that is a possibility, the Maharashtra Department of Sales Tax has said that there are three options available with developers to calculate the MVAT.

A senior functionary in the Sales Tax office told TOI that under rule 58 of the Act a developer can deduct the price of land as well as expenses on labour and further deduct the VAT he has paid on the materials before arriving at his tax liability under MVAT. Alternatively, the developer can choose the standard deduction method.

There is a third option based on composition at the rate of 5% of the agreement value and deducting from it the tax already paid on purchase of materials. This method does not contemplate deduction for land value, the official said.

Thus for a flat with an agreement value of Rs 30 lakh with land cost of Rs 15 lakh and labour expenses of Rs 5 lakh, the MVAT payable would be Rs 24,500 under the first option and for the same agreement value and land cost with standard deduction of 30% for labour cost, the MVAT would be Rs 28,875. By the 5% composition method, however, the MVAT would work out to as high as Rs 1,15,800.

Real estate developer and director of Gera Developments Rohit Gera said a developer will have to exercise the choice according to his method of paying for labour and materials. He said the composition method which provides for a flat 5% gross MVAT is the least efficient one but there may be some developers who will choose it.

Gera said the extension in time which the Supreme Court has allowed has given time for developers to work out at greater detail their tax liability and select the method which is least painful for their customers. "One thing is sure, the developers will be able to recover from the customers only what they pay to the government, and there is no possibility of a developer charging anything extra under any pretext," Gera said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions