What is the rate of VAT and Service Tax on sale of flat in Karnataka

Q: What is the rate of VAT and Service Tax on sale of flat in Karnataka

Anantha Krishna Jois,

4th May 2013

Builder Review in Mysore

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Yeah..earlier there was no VAT, only the service tax was to be payed for buying an apartment under construction. But after recent Supreme court ruling, there is possibility for them to demand VAT also. VAT is payable on value of goods at the time of incorporation of goods in the works and not the purchase value of goods by the builder/developer. Further, VAT is not payable on value towards immovable property, that is, land.

Monica, Bangalore

18th December 2014

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I think the service tax is around 12.36 percent. in case the property is under construction, the effective rate works out to 3.09 per cent of the value of property. This is due to the fact that service tax is not applicable on the entire purchase price.

Micheal George, Kochi

12th December 2014

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Can somebody give me a correct insight into the VAT & service tax percentage on the flat/apartment in Bangalore. I see there is lot of different perspective in this regard. Please help....

Prakash Badiger,

1st December 2014

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You should ask the builder to provide you a break up of all the charges on a written document. For the payment of the service tax it is always advised to make a payment by check rather than cash, as it is accounted as white money and the white payments will be helpful for you from taxation point of view in future and when you will be planning to sell your property. Don't forget to ask your builder to provide you a receipt when you make him a payment by cheque

Yogendra, Bangalore

5th May 2013

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1) When you buy a flat you buy two things from the builder 1. Undivided Land of Share and 2. The flat Both VAT and Service Tax (As on Jan 2013 ...Service Tax @ 12.36% on 25% of BASIC Price ( if Land Cost is included ) otherwise 12.36% on 33% of Basic Sale price ) need to be paid on no 2 and not on no 1.

Bhaskaran, Bangalore

5th May 2013

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