Builders/Devlopers

[ishwar hegde]

we have built up 29 flats in our own land with our own funds. We want to sell 20 flats to the purchasers and keep 2 for our own use and remaining are given on rent bases Now Karnataka VAT dept claims that we should pay 14% VAT on sale proceeds ( that too on market price and not on registration value). We contested that it does not covered under vat because it is sale of immuvable property and not asale of goos and nither it falls under a construction contract. Please guide us

[YAGAY andSUN]

Kindly show them the definition of Goods as mentioned in the Sale of Goods Act as well as incorporated in the KVAT Act.

Most probably, KVAT Authorities must be asking the payment of WCT on the entire contract amount.  Please discuss this aspect  with you VAT consultant.  To this extent the views of the Department look genuine.

[puneet mittal]

what will be the position if flats are sold during construction stage under dvat act?

AI Summary

Developer Disputes 14% VAT on Flat Sales; Questions Classification as Goods Under Sale of Goods Act & KVAT Act A developer built 29 flats on their own land and intends to sell 20, keep 2, and rent the rest. The Karnataka VAT department demands 14% VAT on the sale proceeds based on market price, arguing it falls under VAT. The developer contests, claiming it's a sale of immovable property, not goods or a construction contract. One response suggests consulting the definition of goods under the Sale of Goods Act and the KVAT Act, while another inquires about the VAT implications if flats are sold during construction under the DVAT Act.