Need Expert Advice !
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We have booked a flat in Bellandur. But we have a few queries. Would you please throw light on some of our doubts on the flat.
This is the cost break up:
1.Basic Cost = 1109 sqft * Rs 4015/sqft = 4452635
2.Car Parking = 250000
3.Aminities=175000
4.BESCOM=99810 (Rs 90 per sqft)
5.BWSSB=Rs 72085 (Rs 65 per sqft)
6.Generator and WTP=75000
Total=1+2+3+4+5+6= 5124530
He has calculated VAT and Service Tax as 8.59% of this total amount.
But he has mentioned 4590607 in construction agreement and 974120 in sale agreement.(Rs 2840 per sqft for 343 sqft of undivided share)
Our Doubts:
1. Shouldnt VAT and Service Tax be calculated ONLY on amount in construction agreement?
2. Shouldnt VAT and Service Tax be mentioned seperately and NOT along with construction cost?
3.Has he overcharged any of the component in the breakup?
1 Answer
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As per my understanding ST & VAT are suppose to be on construction cost but not on land cost. That means when we buy a under construction flat. There will be two elements in agreement. i.e., 1. Land/Sale agreement 2. Construction agreement.
1. Land/Sale Agreement will be usually for (number of sqft * govt guidance value) in that particular register office where the project covers..There should not be any ST&VAT on Land/Sale Agreement.
2. Construction Agreement will be usually (total flat cost ) – amt in Point 1 .
ST & VAT will be applied on point 2 only.
Calculation for ST : (40% of construction cost )*12.36%
Calculation for VAT : (70% of construction cost )*14.5%
NOTE: WITH MY EXPERIENCE AND KNOWLEDGE. The ST & VAT are calculated based on the class in which builder is registered with state government. and Service tax is also calculated based on the percentage of bills for material available with builder
