What is VAT rate for under construction flat? Agreement done in 2008?

surendra joglekar,

15th February 2016

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Hi all,
VAT is applicable only on Material cost @ 14.5% and ST is applicable only on Labour & Services Cost @ 12.36%. Please note that VAT may vary from state to state.

Anirudh Patel, Mumbai

16th February 2016

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Hi,
In budget 2015-16, it was proposed that a homebuyer will pay a service tax of 14% while buying a property that’s under construction instead of the current 12.36%.

As service tax is charged only on the construction cost, the effective rate on the entire value of a property below Rs.1 crore is 3.09% (12.36% on 25% of property value) and for a property above Rs.1 crore, the effective rate on the entire value of the property is 3.71% (12.36% on 30% of property value).

Vinay Dixit, Mumbai

16th February 2016

Hi Surendra,
You may check your agreement with the builder whether there is any mention of VAT, ST or Govt Taxes and who will bear the same. If there is no mention then it is builder's responsibility.

Anirudh Patel, Mumbai

16th February 2016

Comment

Hi Surendra,
The circle rate vary from area to area. Therefore, i request you to check with the local sub registrar office.

khushisha, Mumbai

16th February 2016

Let me clarify that VAT and Service Tax are not applicable for “Constructed Property”. It is only applicable for under construction flat. Secondly, VAT may vary from state to state as it is state subject but service tax is uniform across country i.e. 12.36% as it is fixed by Govt of India.

Rithwik D, Pune

16th February 2016