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Maharashtra Government imposed 1% Vat on property sale from April 1, 2010 in its Budget for 2010-11

The Maharashtra Government has decided to levy one per cent Value-Added Tax on property sale from April 1, 2010 in its Budget for 2010-11. All sale agreements registered on or after April 1 will attract one per cent on the contract price of flats mentioned in the agreement of sale.

For deals closed before April 1, the old method of computation at five per cent would be followed, subject to the Bombay High Court stay on collection being lifted, according to a Sales Tax officer.

The officer pointed out, this time round, the State had brought in an amendment to VAT in the Assembly and hence there could be no further dispute on the matter.

With the court stay in force, builders were depositing the VAT component in an escrow account pending the outcome of the case. Some of them were even accepting post-dated cheques and indemnity bonds for the amount from buyers.

The Maharashtra Finance Minister, Mr Sunil Tatkare, said, while announcing the State Budget on Thursday, the levy was in accordance to the Supreme Court judgment which said “VAT becomes leviable on the sale of construction material used in the construction of flats,”

Mr Pranay Vakil, Chairman, Knight Frank India, said the decision though prospective, ended an issue that was unclear till now.

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0 Comments

  1. KP.Yohannan says:

    Dear Sir,

    I have purchased a Flat and registered on 07.06.2006 for about Rs.35,00,000/-and Builder has not asked for any VAT payment. Last month Builder sent a notice asking for 5% VAT on sales value. According to him, VAT issue as was under judicial process. And now Sales Commissioner has issued notice and claimed consolidated VAT from the Builder. Builder has never informed as about such a pending Tax due to Govt. We have no clarity as to who has to bear VAT. Since Builders Association had gone to court, we have never been informed about.

    Please inform, whether i am liable to pay the VAT.
    What was the period of OLD VAT applicable.

    With best regards
    KP.Yohannan
    Kurla east

  2. Vinay Shirke says:

    I have purchased a 1 BHK flat in Mar 2012 in Thane Ghodbunder Road. The agreement value was 49,88,599. While registration builder has asked me to pay 1% MVAT (48,885) and told me that it would be part of agreement value and I just need to pay 99% of Agreement value. But now he is refusing and says that as per agreement all Taxes, VAT etc. to be paid by purchaser. I also have a receipt given by builder for MVAT paid to him.
    As per my understanding MVAT is to be paid by builder and not by purchaser.
    Can I now fight with Builder for refund of MVAT?

  3. sachin says:

    Dear sir I have purchased the flat on August 2010 in Bhivpuri now builder is asking for vat my sale agreement value was 1057000 lacs pls advice How much vat whose responsible is to pay the vat amt

  4. jitendra says:

    Dear sir I have purchased the flat on August 2010 in pune now builder is asking for vat and service tax my sale agreement value was 16 lacs pls advice How much vat and service tax and whose responsible is to pay the vat and service tax.

  5. shardul says:

    before 1 april 2010 vat on construction contracts as per bombay sales tax act is 5% and 5% tax paid by builder and 1% of tax to be paid by purchaser after 1 april 2010 this is on the registered date of the flat pl guide me because builder had taken 5% tax from the purchaser

  6. Abhay K. Hulwan says:

    I have purchased 2BHK Flat at Dombivli on 16/03/2010 and the Agreement for Sale has been made on 06/05/2010 and subsequently registered on 07/05/2010. I had obtained possession of my Flat on 31/07/2011. The Builder had demanded me 1% value of Sale Agreement on 13/10/2012 and requested to pay on or before 31/10/2012 to avoid interest or penalty. In the context of various and vague announcements by the Govt. of Maharashtra from time to time on VAT to be paid by Builder as well as the Flat Purchaser(who are layman to understand the legal aspect), let me have your correct legal opinion as to what percentage I have pay VAT on my Flat and interest or penalty thereon if I want to pay the same as on date. I will be highly obliged if you advice me in the matter. Thanks & Regards.
    Abhay Hulwan, Dombivli.

  7. Vasant M.Harwande says:

    Dear Sir

    Į have purchasd flat in Badlapur in 2011 and registration iš complete in Aug 2011.Now flat is ready for possessions & the builder iš Demanding Vat & Service Tax. He did not inform me about the earlier.

    Can Į know the exact solution in this case, if I applicable to pay the service tax & Vat or not ? Because the service tax is applied in July 2012.

    kindly guide me.your response iš highly appreciated.

    Regards
    Vasant M.Harwande

  8. Sandeep says:

    Dear sir,

    Į have purchasd flat in dombivli in feb2011and registration iš complete in may 2011.
    Now the builder iš asking about Rs.33000(Aš per builder Vat iš about 7000 and remaining iš interest on this amount.

    He did not inform me about this earlier.

    Can Į know the exact amount of Vat iš or Can Į pay vat directly to government?

    Also please clarify that. this interest on vat iš aš per rule or it iš for builder.

    Kindly guide me.your response iš highly appreciated.

    Sandeep.

  9. Sandeep says:

    Dear sir,

    Į have purchasd flat in dombivli in feb2011and agreement done in may 2011.
    Now the builder iš asking about Rs.33000(Aš per builder Vat iš about 7000 and remaining iš interest on this amount.

    He did not inform me about this earlier.

    Can Į know the exact amount of Vat iš or Can Į pay vat directly to government?

    Also please clarify that. this interest on vat iš aš per rule or it iš for builder.

    Kindly guide me.your response iš highly appreciate.

    Sandeep.

  10. Vinay says:

    I have purchased semi detached bunglow in Nagpur, which was registered ( sales agreement )in yr 2007 that time it was under construction, i couldnt made 100% Payment, now for pocession builder is asking to pay 5% VAT plus penalty amount Rs.2Lacs.also i would like to understand Registration was done in 2007, builder is again asking for registration charges & giving explanation that property charges is increased..Please suggest whether it is justified also confirm any other charges is required to pay.

  11. Mithilesh Dubey says:

    I hav purchased flat in kalyan in jun2011 & agreement in may2012. Now during possesion builder is asking for vat 2.35%. Is it really required & if required then tell exact percentage of vat % service tax by maharashtra govt.

  12. bhadange says:

    bhadange sachin
    Dear sir
    i have purches new home with Rs .5.68 L. now bulder demand 4 per. vat+service tax.pl conform me .what is acctual percentege of vat &service tax

  13. Gaurav Misra says:

    Hi,

    I have purchased a flat in Thane in 2010 (registered on 25th Feb 2010) from first owner (not from builder). At the time of purhcase the flat was fully constructed and ready to move in, and building was ready. Now the builder has sent a letter asking me to pay VAT of 1% on the original agreement amount (ie agreement value on which first owner had registered the flat under). He claims he has already paid VAT and now wants me to pay him the amount. Its clear that he will not go behind the first owner to claim the amount but will target whoever is the current owner. Am I liable to pay the VAT amount as I am second buyer of this property which was already constructed when I purchased it?

  14. suhas gaikwad says:

    hi,
    i have booking new flat at rural area in pune dated on march 2011,so will you tail me how much percentage vat,service tax and stamp duties paid to builder.

  15. Sanju says:

    Hi,
    Dear Sir,
    I have purchased a flat in 2008 in mulund east- mumbaiand I am staying (ocupancy) since 2008 …. but as of today builder has not completed the registration pocedure…. and now he is asking for vat amount of 1.15 lacks and the same he is demanding from all the flat members …
    He is not ready to give us the registration & OC details. Pls help us how can we cope up with such type of situation ….

    Your prompt response would be greatley appreciated.

    Thanks.

  16. ashish kayare says:

    I had purchased flat in Aurangabad maharashtra in June 2008 & now I received a latter from builder for service tax on 8th oct 2012 ,amount in not mention in latter,While I purchased flat construction was almost completed only finishing work was pending ,that time builder has not mention about this charge or any dispute between builder and state government regarding this VAT( service tax) even though as per aggrement and it was not mention in agreement.

    I took a loan from bank and amount has been given in 2-3 installment.

    What should i do in such case pls suggest

  17. Nischal Ratnaparkhi says:

    Hi,
    I booked flat in Kalyan (W) and regestration on 11/82009. now builder sent me letter to pay 5% MVAT.as per agreement.
    Do i need to pay MVAT. & also plz. clarify me that how can govt. demands 5% vat from 2006 upto march 2010 & 1 % from april 2010 any specific reason behind this. can I submit the janhit yachica on this issue.

    Thanks,

  18. Rabin says:

    Dear Sir
    I made an agreement to sale on 19th March 2011 and took the possession in next month.

    1. What would be the MVAT tax % to be paid to builder?
    2. If the builder has already received the amount from me, how would be its receipt? Like a government receipt or receipt from builder?
    3. Can you give a detailed calculation  on how to calculate MVAT on registered amount? Any deductions allowed? So as I come to know that the builder has not fooled me.

    As a layman, unable to understand the agreement and many receipts attached with it !!!!!

    Kind request to guide.

  19. Dev says:

    There is one news in Sakal paper on page number 4 dated 11 August 2012 about Property Taxes.I have booked the flat  in under construction site in Pune (in Gram Panchayat Area). Govt Registration date is 04/08/2011 and I am getting possession in December-2012. In agreement it is written that service Tax and VAT will be charged as and when applicable by government.Now My query is:
    1)is service Tax is applicable? if yes how much?
    2)is VAT applicable? if yes how much?
    3)who should pay these charges? builder or flat buyer
    4)if buyer has to pay then can we directly pay this taxes?

  20. purnendu says:

    I had book a flat in Thane on 2009 & sale deed registration also made during 2009. Now Builder is asking for 5% of agreement value as VAT, also I am paying 2.47% as Service Tax.
    Can you guide me whether 5% VAT is really need to pay??

    Regards,

  21. Minin says:

    I have made agreement for purchase of flat in Aug.2011. Agreed price is Rs.7,00,000. Whether I need to pay VAT separately to Builder?. What is current rate of VAT. My flat is not ready and no final agreement is made. Kindly guide me.

  22. shyam says:

    Sir, I have purchased a flat in Pune. I want to know when the payment of VAT has to be done to the builder? My possesion is planned in Nov 2012. Builder is demanding the VAT. But I want to do the payment just before the possesion. Is it Ok to delay the payment?

    Pl confirm asap.

  23. sanjay k choudhary says:

    I have purchased a flat and registration was done on 10th march 2010. Builder is asking for 5% vat before possession. i heard that high court stay order is in force for collection of the money. has the high court verdict has come . Pls advise me urgently.

  24. Satish Aspat says:

    We have purchased a flat in March 2010. Possession of the flat is in the month June 2012. Please tell me at what rate I have to pay the VAT.

    Thanks.

  25. V.G.Dandekar says:

    TO WHOM IT MAY CONCERNED.

    I have booked the flat at Vashi. The builder has asked for VAT @1% on basic value of my property. However, I have paid the same immediately on receipt of their letter but they refused to give the receipt of the same.

    I want to know why builder cannot give the receipt? or is there any specific reason?

    Thanks,

  26. Holkar says:

    Deas Sir,
    I am purchse home on 07/04/2010 of agreement value is 185000, Builder is asking for to pay service tax 58900 with penlty & 1 % Vax of 18900 amount.
    So, please let me know how much amount i have to pay to builder as a service tax & VAT. If possible then sent me GR copy.

    Thanks & regards, Holkar N.S.

  27. Niwrati says:

    Deas Sir,
    I am purchse home on 07/04/2010 of agreement value is 185000, Builder is asking for to pay service tax 58900 with penlty & 1 % Vax of 18900 amount.
    So, please let me know how much amount i have to pay to builder as a service tax & VAT. If possible then sent me GR copy.

    Thanks & regards, Holkar N.S.

  28. RAMESH Yadav says:

    Hi i have purchased under construction flat in jan 2009 reg in April 2009 .I have paid service tax @ 2.575 % .is MVAT is applicable now ? what % ???? i will likly get possesion in May 2012 .

    Thx

  29. C N Iyer says:

    When it comes to tax one is not supposed to question. Remit tax and be more patriotic and set example to others. Don’t be confused at all in this matter, after all builders are lerying this for your benefit only.

  30. rajiv thakur says:

    I have purchased a flat on 25.06.2009,and was supposed to get possession in April 2011.. now while taking the possession of the flat builder is asking for vat (60 k)…what are my options.as i don’t have the money

  31. Pundalik Kulkarni says:

    Hi Sir,

    I have paid VAT 1% to builder, As our was redevelopment Building but i have purchase 17 Carpet Extra , Builder gave us the possession on 31.07.2011 Our agrement Registration done on 31.10.2009 , Whether for VAT we are applicable or not . Also in agreement it was not mentioned regarding TAX

  32. jacob john says:

    I have done my flat registeration on june 2010 the first cheque payed to the builder on 12/june/2010.

    Can builder charge me vat & sc. If i registered on june 2010????? help please reply…

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