Hi Friends,

Yesterday I have got demand letter from builder for VAT 1% of agreement value of my flat. I have purchased a flat in Sapphire Park (Pride Purple Group) in May 2010.

Is the final decision on VAT is out? or Still any litigation/decision pending in court?
Also can any one bought home after 1st April 2010, have your builder demanding VAT? If yes, then in whose name the VAT should be paid? builders or govt?

Thanks in advance!

Regards,
Datta
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  • Originally Posted by datta.ca
    Hi Friends,

    Yesterday I have got demand letter from builder for VAT 1% of agreement value of my flat. I have purchased a flat in Sapphire Park (Pride Purple Group) in May 2010.

    Is the final decision on VAT is out? or Still any litigation/decision pending in court?
    Also can any one bought home after 1st April 2010, have your builder demanding VAT? If yes, then in whose name the VAT should be paid? builders or govt?

    Thanks in advance!

    Regards,
    Datta

    Dear datta,
    1% VAT is applicable on flats registered after 1st April 2010. You need to pay it in the name of builder since it is indirect tax. Builder has to pay it to the Maharashtra State Tax dept by 21st of each month.

    Note: Decision on 4% VAT case is still pending in High Court.
    CommentQuote
  • Originally Posted by Jitu_Sir
    Dear datta,
    1% VAT is applicable on flats registered after 1st April 2010. You need to pay it in the name of builder since it is indirect tax. Builder has to pay it to the IT dept by 21st of each month.

    Note: Decision on 4% VAT case is still pending in High Court.


    Jitendra...You are doing a great job on this forum. Best wishes...
    CommentQuote
  • Originally Posted by Jitu_Sir
    Dear datta,
    1% VAT is applicable on flats registered after 1st April 2010. You need to pay it in the name of builder since it is indirect tax. Builder has to pay it to the IT dept by 21st of each month.

    Note: Decision on 4% VAT case is still pending in High Court.


    Jitu sir, the 1% VAT is state govt tax.
    Whereas, the IT department is Central govt authority . Isn't it ?
    CommentQuote
  • Originally Posted by HemantDesh
    Jitu sir, the 1% VAT is state govt tax.
    Whereas, the IT department is Central govt authority . Isn't it ?

    Dear hemantdesh,
    Regrets. Collected VAT is to be paid to Maharashtra State Govt Tax dept. Correction made in the post. Thanks for your support.
    CommentQuote
  • Originally Posted by harishkulks
    Jitendra...You are doing a great job on this forum. Best wishes...

    Dear harishkulks,
    Thanks for your kind words. Will always try to make my contribution as much as possible. Thanks for your wishes.
    CommentQuote
  • Originally Posted by datta.ca
    Hi Friends,

    Yesterday I have got demand letter from builder for VAT 1% of agreement value of my flat. I have purchased a flat in Sapphire Park (Pride Purple Group) in May 2010.

    Is the final decision on VAT is out? or Still any litigation/decision pending in court?
    Also can any one bought home after 1st April 2010, have your builder demanding VAT? If yes, then in whose name the VAT should be paid? builders or govt?

    Thanks in advance!

    Regards,
    Datta


    Ask the builder to show you the government notice asking for 1% VAT
    Also do not pay it in the name of the builder. Address the cheque to the govt if you are required to pay.
    CommentQuote
  • Originally Posted by Jitu_Sir
    Dear datta,
    1% VAT is applicable on flats registered after 1st April 2010. You need to pay it in the name of builder since it is indirect tax. Builder has to pay it to the Maharashtra State Tax dept by 21st of each month.

    Note: Decision on 4% VAT case is still pending in High Court.


    One quick question...is it on flats registered after 1st April or flats booked after this date?
    CommentQuote
  • Originally Posted by lazybone007
    Ask the builder to show you the government notice asking for 1% VAT
    Also do not pay it in the name of the builder. Address the cheque to the govt if you are required to pay.

    Dear lazybone007,
    There is clear state govt circular for 1% VAT which should be available at the builders' desk. This tax is to be paid in the name of builder since it's an indirect tax.
    CommentQuote
  • Originally Posted by fundoo158
    One quick question...is it on flats registered after 1st April or flats booked after this date?

    Dear fundoo158,
    It's applicability is for flats registered after 1st April 2010. Obviously flats booked after this date would also come under the vat taxation.
    CommentQuote
  • I think there was a Case pending in High Court - about Dual Taxation - by the State and Central Govt for the same property - this needs to clarified - as you might have to pay 1% less to State later - however - better to mention this amount in the agreement AND also provide a cheque - written at the back - "AGAINST VAT 1%" to the builder - Also, dont forget to mention, that if this tax is waived off, the builder is liable to PAY you back the amount + interest.
    CommentQuote
  • Originally Posted by Jitu_Sir
    Dear lazybone007,
    There is clear state govt circular for 1% VAT which should be available at the builders' desk. This tax is to be paid in the name of builder since it's an indirect tax.


    what is indirect tax? Is the tax to be paid by the builder but the burden is being passed on to the buyers? I believe if the govt is levying tax on the buyer, the buyer should pay the govt and not the builder
    CommentQuote
  • Originally Posted by lazybone007
    what is indirect tax? Is the tax to be paid by the builder but the burden is being passed on to the buyers? I believe if the govt is levying tax on the buyer, the buyer should pay the govt and not the builder

    Dear lazybone007,
    When you make any purchases you see some amount under VAT and/or ST which are collected by the seller which in turn pays back to govt. Hence called as indirect tax.
    CommentQuote
  • Originally Posted by Jitu_Sir
    Dear lazybone007,
    When you make any purchases you see some amount under VAT and/or ST which are collected by the seller which in turn pays back to govt. Hence called as indirect tax.


    Jitu sir, when we pay VAT on food item in the hotel, we see that on the bill. Where does it appear on the paper/ document in case of RE ? Do we get receipt of this VAT paid?
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  • :), thats a good question Hemant, the problem is -- we dont know whether the tax is paid by the builder for your property - why doesnt he first furnish a receipt against the said property to the buyer and then collect the money?
    CommentQuote
  • Originally Posted by HemantDesh
    Jitu sir, when we pay VAT on food item in the hotel, we see that on the bill. Where does it appear on the paper/ document in case of RE ? Do we get receipt of this VAT paid?

    Dear hemantdesh,
    One should get the receipt specifying against VAT.
    CommentQuote