Case Law Details
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
Please become a Premium member. If you are already a Premium member, login here to access the full content.
I have booked a flat in 2009, which got registered in March 2010. The construction extended for more than 1.5 years than what was promised initially and I am hoping to get the possession in next two months. I am arranging the final possession time payments for the same. With the delay in construction, I had to pay the new Construction Service Taxes, and now, the builder asked me for the 5% MVAT which is too much taxing for me. I stay in a rental apartment currently and paying PreEMI for Home Lone. Can anyone suggest what action I should take in terms of MVAT
I have purchased a Flat, the agreement dated 09.09.2011, builder has ask me to pay the Service Tax & VAT.
As a owner of Flat will have to pay the above Taxes, If no then why ? If yes then why ?
Thanks
Navin
I have booked a flat in 2009, which got registered in March 2010. The construction extended for more than 1.5 years than what was promised initially and I am hoping to get the possession in next two months. I am arranging the final possession time payments for the same. With the delay in construction, I had to pay the new Construction Service Taxes, and now, the builder asked me for the 5% MVAT which is too much taxing for me. I stay in a rental apartment currently and paying PreEMI for Home Lone. Can anyone suggest what action I should take in terms of MVAT?
What will the consequences builders face if a buyer complaints about the builder who already have collected VAT from its buyers.
Can a buyer ask for refund of VAT already paid to the builder?
What are the steps a buyer should take if the builder is passing his burden on the buyer for VAT?
when we get judjment copy sir thnku
VAT should not be passed on by the builders/developers to the buyers. The tax incidence should end at builders/developers level. Buyers are not buying the premises for subsequent sale. In case of construction business the end user is builder and not the buyer of flat. Infact immovable property is not goods in substance, I dont think any body do a business of buying and selling of immovable properties. The VAT should not be levied at all on immovable properties.