Levy of VAT on Sale of Flats in India
This blog considers the issues arising under the Constitution of India when a person goes and buys a flat or a commercial property from a builder; is it a “Sale”, and can the activity be amenable to a levy of VAT?
Issues involved in Taxation of Construction contracts
There is a lot of mystery regarding taxation of Construction activities in India. The mystery starts from the fact that a Construction contract involves both labour and material and hence, both Service tax and Value Added tax is levied on one transaction. The process becomes more complex depending upon a number of factors such as the Scope of work, the nature of the contract, whether the contract includes any further sub-contracting, whether individual prices have been specified for each part of the scope of work and whether the contract involves off-shore and on-shore activities etc.
Let us first consider the Indirect taxes applicable on a Construction contract. As already stated [...]