Supreme Court (SC) on Tuesday stayed the Bombay high court judgment dismissing the builder association’s appeal against the state government’s move to levy 5% value added tax (VAT) for flats sold between 2006 and 2010. The amount is 1% for flats sold after 2010.
The SC has extended the deadline for builders to pay VAT from August 31 to October 31. If they do so, they are not entitled to pay penalty and 15% interest on delayed payment of VAT, according to the SC interim order. The builders must register with the sales tax department by October 15 before paying VAT. The VAT money will be collected and kept in a separate account of the state government. If the state loses the case, the developers will get back their money along with interest. The date for the final SC ruling is not known as yet.
A bench of justices RM Lodha, AR Dave and Ranjan Gogoi on Tuesday stayed the sales tax department notification dated August 6, 2012, asking VAT developers to file their VAT returns by August 31.
The SC passed the interim order while hearing a special leave petition filed by MCHI-CREDAI, a developers’ representative organisation. The petition challenged the Bombay high court order dismissing the writ petition against the state government in the VAT case. Dr AM Singhvi and Parimal Shroff appeared on behalf of MCHI-CREDAI.
Promoters & Builders Assn. v. State of Maharashtra (SUPREME COURT OF INDIA) – CIVIL APPEAL NO. 17709 OF 2012 – Dated- 28.08.2012