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unnikk · 29-06-09

Do not buy flat. Raise voice against the verdict of the court.
VAT on flat must be scraped. We vote in favor of our ministers, but they act against us when they are in power!! The government try to put more burden on common people. If the government does not scrap VAT, there will be a tragedy in real estate and among the flat owners. FOLLOWING IS THE NEWS APPEARED IN MUMBAI MIRROR.

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State govt firm on levying VAT on flats

Citing Supreme Court judgement, government says tax is legal

By Ravikiran Deshmukh
Posted On Sunday, June 14, 2009 at 03:00:57 AM

A stand taken by the Democratic Front Government recently has dashed the hopes of lakhs of developers and flat buyers in the city. The state on Friday, remained firm that the current 5% value added tax (VAT) on the purchase of a new flat, still stands good.

It was in reply to a written query at the state Assembly that the government stated that the Supreme Court has ruled that VAT is applicable on all construction activities undertaken through the Works Contract Act. “Accordingly, the state amended rules of the Maharashtra VAT Act, empowering the government to levy the tax on all such flats,” stated Finance Minister, Dilip Walse Patil, in his reply.

However, the minister added, the government will not levy VAT on flats that are ready for sale. The tax is applicable only to those buildings that are under construction as the VAT is levied on the construction materials used, he explained.

Meanwhile, the government’s ruling has upset buyers as well as members of Maharashtra Chamber of Housing Industry, which had approached the HC in the matter. The case is pending in HC.

MCHI receives relief

The only relief MCHI has received from HC is that it has asked the government to not recover the tax from its 550 members, until the matter is disposed of. The chamber had also argued that since a home is an immovable property, and not a commodity, applying VAT was wrong and impracticable. But the government has not offered them relief.

Unresolved issue...

Even after the government’s clarification, there is an issue that remains unresolved - whether the VAT is applicable if a developer undertakes construction activity, but not under the Works Contract Act. Many construction projects in Mumbai are being carried out based on agreements between landlords and developers, and not under the Works Contract Act. “We have been asking for clarity on the issue but the state has not stated anything clearly,” said a developer requesting anonymity.

29-06-09	#1
unnikk New Member Join Date: Mar 2009 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts	Beware of vat on flat before buying a flat Do not buy flat. Raise voice against the verdict of the court. VAT on flat must be scraped. We vote in favor of our ministers, but they act against us when they are in power!! The government try to put more burden on common people. If the government does not scrap VAT, there will be a tragedy in real estate and among the flat owners. FOLLOWING IS THE NEWS APPEARED IN MUMBAI MIRROR. Today: Wed, Jun 17, 2009 \| Temp : 33°C\| Mirror XI Home \| Epaper \| Indiatimes \| My Mail \| Make MM your Home Page \| Subscribe to NewsLetter \| RSS Print Edition Quick News Air India strike: 17,000 employees warn of strike after salary payment deferred......Dacoit held from Navi Mumbai hospital......Maoist strike in West Bengal; 3 CPM leaders killed...... You are here - HomeNewsCity Story City State govt firm on levying VAT on flats Citing Supreme Court judgement, government says tax is legal By Ravikiran Deshmukh Posted On Sunday, June 14, 2009 at 03:00:57 AM A stand taken by the Democratic Front Government recently has dashed the hopes of lakhs of developers and flat buyers in the city. The state on Friday, remained firm that the current 5% value added tax (VAT) on the purchase of a new flat, still stands good. It was in reply to a written query at the state Assembly that the government stated that the Supreme Court has ruled that VAT is applicable on all construction activities undertaken through the Works Contract Act. “Accordingly, the state amended rules of the Maharashtra VAT Act, empowering the government to levy the tax on all such flats,” stated Finance Minister, Dilip Walse Patil, in his reply. However, the minister added, the government will not levy VAT on flats that are ready for sale. The tax is applicable only to those buildings that are under construction as the VAT is levied on the construction materials used, he explained. Meanwhile, the government’s ruling has upset buyers as well as members of Maharashtra Chamber of Housing Industry, which had approached the HC in the matter. The case is pending in HC. MCHI receives relief The only relief MCHI has received from HC is that it has asked the government to not recover the tax from its 550 members, until the matter is disposed of. The chamber had also argued that since a home is an immovable property, and not a commodity, applying VAT was wrong and impracticable. But the government has not offered them relief. Unresolved issue... Even after the government’s clarification, there is an issue that remains unresolved - whether the VAT is applicable if a developer undertakes construction activity, but not under the Works Contract Act. Many construction projects in Mumbai are being carried out based on agreements between landlords and developers, and not under the Works Contract Act. “We have been asking for clarity on the issue but the state has not stated anything clearly,” said a developer requesting anonymity.