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Can a builder charge VAT after registration of conveyance deed


07-Oct-2023 (In Tax Law)
A large number of flat owners of housing project developed by pvt builder have been charged VAT by builder in beginning of year 2017,even though conveyance deed of flats and possession of flats to flat owners was completed by end of Dec 2013.Whether collection of VAT in above facts on total cost of flat after more than 3 years of conveyance deed and giving possession is correct .If builder is wrong in collecting VAT ,how can the money paid by all flat owners be recovered back from builder .
Answers (1)

Answer #1
634 votes
Builder after handing over of flats and registration can not charge VAT. It is totally wrong. VAT ans service tax is applicable in construction phase. I hope it is something which the builder is not entitled to do. What I can understand that they may assessment now and demand must have been created by the department on builder. It requires review of the demand letter of builder and contract i.e. builder buyer agreement and conveyance deed.

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