One percent VAT imposed by Maharashtra on flat sale !

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VAT is a sales tax on the “agreement for sale” between builder and buyer.   .Maharashtra  government has issued a notification on the imposition of 1 per cent value added tax (VAT) on the contract price of flats mentioned in the agreement of sale registered on or after April 1.This would be in addition to a 5 per cent stamp duty, 2.38 per cent service tax and 1 per cent local self-government tax in certain districts. The total burden comes to 8.38 per cent in Mumbai and 9.38 per cent in other places.

VAT is only to be charged on the flat which is booked while it is under construction via “agreement for sale”, which on the lines of above is construed as “Works Contract”, which attracts sales tax which is called VAT