• Jan
  • 29
  • 2014

VAT Notification on Amendment to Rule 58 related to Builders & Developers

FINANCE DEPARTMENT

Madam Cama Marg, Hutatma Rajguru Chowk, Mantralaya,

Mumbai 400 032, dated the 29th January 2014

NOTIFICATION

MAHARASHTRA VALUE ADDED TAX ACT, 2002.

No. VAT 1513/CR-147/Taxation-1.—Whereas, the Government of Maharashtra is satisfied that circumstances exist which render it necessary to take immediate action further to amend the Maharashtra Value Added Tax Rules, 2005 and to dispense with the condition of previous publication thereof under the proviso to sub-section (4) of section 83 of the Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005) ;

Now, therefore, in exercise of the powers conferred by sub-sections (1), (2) and (3) read with the proviso to sub-section (4) of section 83 of the said Act, and of all other powers enabling it in this behalf, the Government of Maharashtra hereby, makes the following rules further to amend the Maharashtra Value Added Tax Rules, 2005, namely :

1. (1) These rules may be called the Maharashtra Value Added Tax Amendment Rules, 2014.

(2) They shall be deemed to have come into force with effect from the 20th June 2006.

2. In rule 58 of the Maharashtra Value Added Tax Rules, 2005,

(1) in sub-rule (1), after TABLE, in Note, after the words “from the total contract price,” the words, bracket, figure and letter “the cost of land determined under sub-rule (1A) and then,” shall be inserted ;

(2) in sub-rule (1A),

(a) for the words, bracket and figure “making the deductions under sub-rule (1) and” the words “deduction of shall be substituted ;

(b) the following proviso shall be added, namely :

” Provided that, after payment of tax on the value of goods, determined as per this rule, it shall be open to the dealer to prove before the Department of Town Planning and Valuation that the actual cost of the land is higher than that determined in accordance with the Annual Statement of Rates (including guidelines) prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995. On such actual cost being proved to be higher than the Annual Statement of Rates, the actual cost of the land will be deducted and excess tax paid, if any, shall be refunded.” ;

(3) after sub-rule (1A), the following sub-rules shall be inserted, namely :

” (1B)(a) Where the dealer undertakes the construction of flats, dwellings, buildings or premises and transfers them in pursuance of an agreement along with the land or interest underlying the land then, after deductions under sub-rules(1) and (1A) from the total contract price, the value of the goods involved in the works contract shall be determined after applying the percentage provided in column (3) of the following TABLE depending upon the stage at which the purchaser entered into contract.

Sr. No.

(1)

Stage during which the developer enters into           a contract with the purchaser.

(2)

Amount to be determined as
value of goods involved in
works contract.
(3)

 

(a)

            Before issue of the Commencement Certificate.

100%

(b)

From the Commencement Certificate to the completion of plinth level.

95%

(c)

After the completion of plinth level to the completion of 100% of RCC framework.

85%

(d)

After the completion of 100% RCC framework to the Occupancy Certificate.

55%

(e)

After the Occupancy Certificate

NIL%

(b) For determining the value of goods as per the Table of clause (a), it shall be necessary for the dealer to furnish a certificate from the Local or Planning Authority certifying the date of completion of the stages referred above and where such authority does not have a procedure for providing such certificate then such certificate from a registered RCC consultant.

(1C) If the dealer fails to establish the stage during which the agreement with the purchaser is entered, then the entire value of goods as determined after deductions under sub-rules (1) and (1A) from the value of the entire contract, shall be taxable.” ;

(4) in sub-rule (2), after the words, bracket and figure “sub-rule (1)” the brackets, figures, letters and words “, (1A) or, as the case may be, under sub-rule (1B)” shall be inserted.

By the order and in the name of the Governor of Maharashtra,

O. C. BHANGDIYA,

Deputy Secretary to Government

Sandeep Kanoi

2 Responses to “VAT Notification on Amendment to Rule 58 related to Builders & Developers”

  1. Aashish Jadhav says:

    Sir
    the percentage of deduction is applicable on the amount after the deduction of labour and Land OR before the deductions.

  2. Vishwas Gupta says:

    Sir, please explain with a simple example.

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