I am resident of Bangalore and I have few questions on real estate in Bangalore. I heard there is a GO passed by Karnataka government, banning all the registrations process by CMC. Is this GO applicable only in the city of Bangalore or whole of Karnataka? Has this been lifted or still in place? Do I have to pay VAT and Service Tax if I book apartment from a builder? The apartment builder told me that there will be a construction agreement and a land agreement. Since, the construction agreement more is like a service rendered by builder to the buyer, can I just buy Service tax on the construction cost?
- by Sibicon, Bangalore
The government orders prohibiting the registration of certain properties is applicable not only to Bangalore but entire Karnataka. The prohibition is not on all properties in the jurisdiction of City Municipal Councils but only on transfer of constructions on sites which have come up on agricultural lands, which are not converted and in layouts which are not approved by the competent authority. The prohibition is still in force.
Sales tax and service tax is applicable on flats got constructed through a builder.
The purchase of flats involves two important documents, purchase of some percentage of undivided shares in the land and construction agreement in addition to other documents like agreements, possession certificate, etc. The purchase attracts sales tax and service tax.