Gujarat State VAT Budget Proposals affecting the construction sector :-
1. Rate of Stamp duty on development Agreement increased from 1% to 3.5% and on transfer of immovable property as capital contribution by the partner introduced at 3.5% from existing Rs. 10K.
2. According to the recent judgement of Hon. Supreme Court, certain transactions of the developer and civil contractor become taxable as works contract. There is already a provision in the Gujarat Value Added Tax Act, 2003 to levy lump sum tax at the rate of 0.6% for such works contracts. But in absence of legal clarity, some contractors have not paid the tax. Now, since there is full clarity, in order that such contractors be able to make the payment of tax retrospectively, the State Government has decided to announce a scheme for this purpose. Under the scheme, if the registered as well as the unregistered dealers engaged only in civil works contract, makes the payment of due tax retrospectively at the rate of 0.6% for the past years, a scheme for remission of the interest and penalty will be implemented. The scheme shall remain in operation for 180 days from the date of announcement. A detailed scheme in this regard will be declared hereafter.