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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Pune > Fight against VAT demand
View Poll Results: How much VAT has been demanded by your builder ? ( for 20/06/06 to 31/03/10 agreet)
0-0.5% 1 1.03%
0.5-1% 11 11.34%
1-1.5% 14 14.43%
1.5-2% 7 7.22%
2-2.5% 11 11.34%
2.5-3% 8 8.25%
3-4% 27 27.84%
4-5% 18 18.56%
Voters: 97. You may not vote on this poll

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Old August 16 2012, 02:33 PM   #1
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Icon2 Fight against VAT demand

Is this correct that all the buyers who bought u/c property betn 20/06/06 to 31/03/10, will have to pay 5% VAT on agreement value ? + int 15% pa ?

This is huge amount.

Is the VAT flat 5% on agreement value ? Or is there any other calculation involved ?

How the builder will recover the VAT from the buyer who have already got possesstion ?

Do you have more information on this ?

 
Old August 17 2012, 04:35 PM   #2
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Hello boarder, can you pls provide some information on this ?
 
Old August 18 2012, 05:54 PM   #3
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Yes, my builder has also intimated me with a letter. I am trying to find out as well if this is true. Is the ruling from Mah. Govt on this final? It is linked to MVAT act 2002
Also for those who did agreement have paid VAT @1%, why should we be paying 5% on the same.
 
Old August 18 2012, 10:13 PM   #4
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Quote:
Originally Posted by stohid View Post
Yes, my builder has also intimated me with a letter. I am trying to find out as well if this is true. Is the ruling from Mah. Govt on this final? It is linked to MVAT act 2002
Also for those who did agreement have paid VAT @1%, why should we be paying 5% on the same.
If you have paid 1% VAT, you must have done the agreement after 1 Apr 2010.
The above issue is applied to agreement before 1 Apr 2010.
 
Old August 19 2012, 11:46 AM   #5
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No, my agreement is in 2009. Why shud we pay 5% and those after 1.4.10 pay 1%.
That is not fair.
Again, he mentioned if not paid, then the penalty wud be paid by us as told by government.
Could be anywhere from 20% to 70%

Can we pay this installaments? Is there a chance of extending the deadline as gov. has set it to31.8.12
 
Old August 19 2012, 01:16 PM   #6
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Quote:
Originally Posted by birendra
Dear Jitu sir, Hope you remember me. I am in London for the past 20 months.

Need some clarification and direction from you on the VAT.
Dear birendra,
Yes I do remember you for your intellect in RE.
Quote:
Originally Posted by birendra
What is the VAT applicable for people who registered house in 2008. As per rule looks like it is 5% but I am told that based on how builder does the accounting offset etc the actual VAT that builder pays is not more than 1% even in case when the value announced is 5%. What is your opinion
As per Maharashtra VAT Act 2002 its 5% on Agreement value. Govt has provided 3 methods to calculate VAT taking into consideration the land cost and set off for bills paid within that period. Its a tedious jobs to find the exact percentage but roughly it comes about 4.09%.
Quote:
Originally Posted by birendra
IS the VAT also applicable on the price that one paid for garden area for a bungalow or is it just for the constructed built up area
VAT is applicable only on Agreement value.
Quote:
Originally Posted by birendra
Can builder charge more total value in the name of VAT then he actually pays to the sales tax department
Presently we have intimated all such Flat Purchasers to make arrangements accordingly. We propose to collect flat 5% VAT + 15% interest per annum. Will pay this VAT amount to Dept, and distribute the refund amount on pro-rata basis.
Quote:
Originally Posted by birendra
If in the agreement there was no mention of VAT and the builder never mentioned it before then now can he ask for interest?
Usually its a standard clause regarding any additional taxes & levies to be borne by the Purchaser. If not then the Purchaser need to consult his lawyer.
Quote:
Originally Posted by birendra
The end date to pay without penalty is 31st August. What is your personal opinion. Shd one pay right now or wait. I am told that Credai is appealing to the state government to a. charge 1% flat b. remove interest c. Extend the 31st August deadline etc
CREDAI has appeal pending in SC whose hearing is on 27th. We are trying to get a stay order or atleast flat 1% VAT without any interest or penalty thereupon along with extension for the deadline of 31.08.2012. Lets hope there is a good decision taken in public interest.
Quote:
Originally Posted by birendra
I have taken liberty to ask you these questions at a personal level in the hope that uyou will guide.

I would be greatful to you for this.

Warm regards,
Birendra.
My pleasure.
__________________
Jitendra Pethkar | Pethkar Projects
 
Old August 19 2012, 03:36 PM   #7
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CREDAI has appeal pending in SC there hearing is on 27th. There are trying to get a stay order or at least flat 1% VAT without any interest or penalty thereupon. Lets hope there is a good decision taken in public interest. Also for extension for the deadline of 31.08.2012.

My pleasure.[/QUOTE]

Jitu_sir , Thanks for your guidance. This will help all of us.

If govt ask to pay 5%+ int, this will be injustice for all the people who purchased property during said period. Because, govt has later realized that it is a exuberant amount they are charging and later on resorted to 1 % tax after 1 Apr 2010.
So, why are they punishing the people who purchased in the those 4 year period ? This is illogical and injustice.
UncleScrooge and aPALEKAR like this.
 
Old August 20 2012, 04:02 AM   #8
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The challenge is that most of the buyers were not aware of the details. Now it has hit the buyers and time quoted to pay is so short. In addition there is no clarity about the exact net percentage. For example the circular I got says it is 5%, Jitu sir from his experience has mentioned it abt 4%, one of my friend consulted his friend builder and he is told net-net it is abt 1%(even when on paper it looks 5% for registration done before 2010). So it is quite clear that there is not enough clarity. Hence the issue is the following:
1. Time available for buyer is very short to arrange the required money which is on top of his already stretched limits
2. No one wants to pay more than the minimum required as because of the nature of this industry very few people trust their builder and no one thinks that builder will refund it in a fair way (atleast the people I have got in touch says it)
3. There are others who thinks that the builder is trying to use this opportunity to genarate cash out of the buyers as buyers are not sure abt the transparency from the builder. Hence the buyer would actually not know how much VAt the builder paid to the government
4. Members are not sure why they need to pay the interest if this is the first time they are asked for VAT from their builder

Please share if you have any other info as that will be extremely valuable to many members.

Jitu sir, Thanks once again for your suggestion and guidence.

Cheers,
Birendra.
 
Old August 21 2012, 10:57 AM   #9
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Birendra, I think you need to wait at-least till 27th August, to submit the tax to builder. I hope this is the date for SC order.
 
Old August 21 2012, 11:03 AM   #10
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what happens if a person has bought in resale and the original owner had bought it between the above mentioned dates ?
 
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