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.
Hi Sir,
I have purchased a flat on 25.07.2010, now while taking the possesion of the flat builder is asking for 1% vat & 2% service tax. what is the procedure to pay, is it to the builder or the Maharashtra government. If any orders are there kindly attach the same. The builder is refusing to give any thing in writing. Neither he is agreeing to open a fixed deposit between the two. Neither he is giving any receipt, If taxes are levied and has to be paid why not directly to the government. I am so worried and Mentally disturbed Please help me and comment.
Justin
I have register my flat at 06 Feb 2010. Should I give vat or not .What is latest rule for vat for my date of registration. Pl inform Early.My bulider is demading for vat.
My M Vat Refund Application Pending For The Period 01/04/09 To 31/03/10 how to soul this problem ????????????
My Refund Application For the Period 01/04/09 To 31/03/10 Pending How to soul this problem
Some one purchase a flat after 31.3.2010 & the construction completed and completion certificate also taken before 31.3.2010 in that case vat is applicable or not to purchaser?
I learnt that you don’t get a reply for the querries raised here ! What is the point in writing ?
I had purchased a flat by an agreement for sale during june,2011. Now the builder is demanding 5% VAT and 2.75% service tax before giving delivery. He is refusing to give in writing and he says he won’t pay the tax to the Govt. now. He is only keeping the tax deposit with him, to give to Govt. as and when they demand. He is not giving a receipt either. Is the builder right in his demand ? Can I get a redresal of my grievences from any where ?
Respected Sir/Madam,
I would like to ask you, If My sale agreement has been done before 1st April 2010, is there any liability of vat/service tax towards my side? & on how much %agreement value should i pay vat/service tax amount to the builder. & how much % vat/service tax need to pay. I have booked a falt in Thane in Jan2009, still the building is under construction, as per builder the possession will be made in June’2012, I have applied home loan & disbursed 4lac by bank to the builder, evethogh the property has been booked before 2010, builder asks for VAT.. I’m so worried.pls help.
Hi,
I have done flat registration on 21-Jun-2010 and first payment cheque given to Builder on 3-Jul-2010, Builder has charged Service Tax due to cheque given in July.
Can builder charge Service Tax if Registration has done in Jun-2010??? Please reply.
I have purchased flat in 2011 and registration done on July 2011. The agreement value shown Rs. 22 lakhs. I paid to builder Rs. 22000.00 in cash for VAT. The receipt for the same not given to me. The VAT amount not shown in agreement.
Can I get receipt for the same.
Thanks & regard
please advice me as early as possiable
sir
I want to known section and act about vat.
Because builders are taking 1% vat on property.
i have purchased flat on Augst. 2008 in Mumbai. builder has taken 5% vat amount from us whether vat is applicable or not.
How much MVAT is applicable on flats purchased & registered before 1st April 2010 ? Is it 1% or 5%
I would like to ask you, If My sale agreement has been done before 1st April 2010, is there any liability of vat/service tax towards my side? & on how much %agreement value should i pay vat/service tax amount to the builder. & how much % vat/service tax need to pay. reply me at the earliest.
Hi, i’ve done flat agreement in sep 2010. now builder is asking for service tax and vat request you to give some clearty on it. regards, birendra
What are the various taxes applicable for a Builder business (partnership)?
pl clear if my registration was done in APril’2010, in this case how much vat amount i have to pay
reply
R Sir,
I had registered my flat after 01 April 2010. Can I liable to pay 1% VAT. of the cost of the flat. Builder insist me to pay the VAT amount earlier. does the court finalised the verdict which was pending in High Court.
Early reply is requested please.
thanks Balram
Hi, If maharashtra govt applied tax on purchase of property they should add that tax 1% at the time of registration only and that will be applied from APRIL2011,
I know everybuilder taking benifit and intentionally harash to buyer ,
Also there should be rule to give possetion after full payment those who earlier registered property.
Thx. to Hon,ble minister Mr.Tatkare sir
it’s been a year and there is still a stay on the Service Tax and VAT on new properties. My builder is not giving me the possession and is insisting on me paying Service Tax and VAT. He never told me at the time of puchase that there will be this extra cost. 1 week before possession he wants the money for Service Tax and VAT.
Please can you tell me what has to be done?
Dear Sir,
I would like to ask you, If My sale agreement has been done AFTER 1st April 2010, is there any liability of vat towards my side?i.e should i pay vat amount to the builder or not? Pl. reply me at the earliest.
Thanking you.
Regards,
PRAVIN SHINDE
Hi All,
I have registered a flat on Dec 2009 in Pune, now in Jan 2011 is the time for possession and builder is demanding for 4 % of VAT on Property Value. They are demanding PDC cheque without mention date. Otherwise builder will not provide possession to me. I don’t know “What is a reality?” Could you please guide me to my problem? What can be the solutions?
Thank you in advance.
i Have bought a flat in mumbai and the builder has sent me a letter for the dues to be paid at the time of the possession of the flat. as my registration was done in 2009 i am asked to keep an FD with a bank of my choice with a lein to the builder for the % MVAT. it seems the builders have lobbyed against the 5% MVAt and are negotiating to reduce it to 1%. the buiders office says that whenever the decision is made they will call upon for the payment of the money and for now they want to see a suerty by way of FD to be kept. has anyone done something in the similar way kindly advise. thanks
Hi All,
I have register a flat on Nov 2009, now Jan 2011 is the time for possession and builder is demanding for Service Tax 2.5% and 1% of VAT on Property Value. He is demanding PDC cheque without mention date. Otherwise builder will not provide possession to me. I don’t know “What is a reality?”. Please guide me to my problem. What can be the solutions?
Thank you in advance.
Hi,
I booked flat in Casa Bella Lodha and regestration on Nov2009. now builder sent me letter to pay 5% MVAT.
Do i neet to pay MVAT.
Hi,
5% MVT is required to pay.
@Anil Kumar,
Hi Anil I have also been asked for 5% MVAT, because my registration was done before April 2010. As I think is earlier it was 5% and builders got stay. But then govt. reduced it to 1%. Builder asked me to make a fixed deposit. If builder wins the case then we will get the amount back and if govt. wins then it will be paid.
Have you got any other understanding of this??
How much MVAT is applicable on flats purchased & registered before 1st April 2010 ? Is it 1% or 5%
I hav purchased flat in pune in jun2010 & agreement in july. Now during possesion builder is asking for vat 1% & 2.75% service tax. Is it really required & if required then tell exact percentage of vat % service tax by maharashtra govt.
So, if we as a buyer, paying 1% VAT to the builder, will that amount will be exempted from income tax, as that of Stamp Duty / Registration charges?
hi
i have purchase a flat in march but i am doing registration in november 2010 for that i have to pay 1% mvat to builder? court pass decision to pay mvat? and my last Q is how can government takes so much tax from buyer? Stamp duty, Registration, service tax, mvat for a one single house property?
Hi,
The Maharashtra goverment has come up with the new 1% VAT taxation for all the Flats Registration done on or after 1st April 2010. My query is before 1st April 2010, did the taxes for the sale of the Flats were borne by the builder? If yes what was the tax percentage? and also why the 1% VAT tax has now to be borne by the buyer? I am asking this question, because recently i did my flat registration and the builder has asked for the 1% VAT check in the name of the builder. Also my registration was supposed to happen on 26th March 2010, but the builder delayed it intentionally and pushed it to 9th April 2010. My query is by postponing my flat registration, does the builder gain in any way? for i know i am at loss as i have to now pay extra 1% VAT on the sale agreement amount.
Also can you please confirm if the VAT was applicable to builder earlier for building a township. For the builder never discussed about the VAT earlier during the negotiations, which means it was either included in the cost of the flat, or it was exempt for townships.
Your prompt response would be greatley appreciated.
SIR/MADAM,
IAM ACQUIRING A FLAT IN THANE DO I NEED TO PAY 1% VAT TO BUILDER ON AGREEMENT VALUE?…Please mail me the query
Dear Sir,
I would like to ask you, If My sale agreement has been done before 1st April 2010, is there any liability of vat towards my side?i.e should i pay vat amount to the builder or not? Pl. reply me at the earliest.
Thanking you.
Regards,
Gajanansingh Chauhan
Recently I have booked a Flat and its agrement made in Sep10. Now Builder is demanding 1%Vat on agreement cost.Pls. clarify that when should i pay this amt????
And If you having any specific notification about it, Pls provide me… thanks…
Is there any specific notification issued regarding applicanility of 1% vat on all sales deed registered after 1 Aprl 2010 and if any, please provide the reference of same.
I have purchased property in June. Now Builder is asking 1%Vat and 2% Sales tax. Pls. clarify that who should pay the sales tax Builder or Buyer????
I have purshsed flat on December 2007 , builder charge me 5% vat at the time of possiton of flat & they have given me one letter stating that they woluld refund vat amt if is not applicable. they are not refund my money yet
This is all Builder and Government game. Builders are paying heavy amount to Politicians and politicians are the d@@s of builders. Some body is constructing flat for me, as a builder he is constructing flat charging land and construction cost. Vat on construction is none of our business. If this is true then Metal for car shall be under same thing. Builder to take care of this. There should be true value identification for builders.
Pls let me know if it is okay if the builder opens a joint escrow accountwith the buyer wherein the vat money is deposited. what are the advantages and disadvantages.
I retired from Bank in May 2009.
Will I get enhanced Garutity?
Hello All,
As far as VAT concerned on the sale of flat,a builder must inform about this to purchaser.In general builder do not inform about this & make this charges as hidden.Also i would like to indicate here that if any VAT is apply,then the purchaser shall directly pay it to the govt. rather then paying to Builder.
Further i would like to add that VAT may not apply on sale of property (when purchaser purchase it) but for the safeguard of future liabilities of builder,he ask for VAT to the purchaser,which he should not ask.
In my statement,if am wrong anywhere then pls make me correct.Also anyone hurts from statement,then pls give me excuse.
Thanks.
Its true that the VAT should be levied on the sale of material used in the construction of Flats.
I dont know about the exact provisions of leving VAT @1% on sale of property in Maharashtra. But construction of flats is a works contract and also involves labour element in its cost.
I think the exemption or abatement for the labour element should have been provided from the sale value of the flat while considering the sale value of such flat for the purpose of leving 1% VAT on it.
I registered property in Aug’09 & possession is in May’10 . Builder is asking PDC’s for service tax & VAT. Is this legal or not . Pl. guide
gundecha builder has denied me possession of my flat till i provide them with this additional money, This is ridiculous that I was never told to arrange for this earlier and now suddenly a week before possession I have been asked to shell out this money. How etical is this? and can a builder really hold one ransom by driving us to such a point, its very very difficult for a middle class person like me to arrange this kind of money in shuch a short span of time.
I finalized my property early this month. While negotiations VAT was not discussed but now the builder is asking for the same.
Is it a law now?
Were builders paying the 5% earlier?
Do I need to pay it to the builder?
Can I not pay the VAT directly?
Warm Regards, Sameer N Shah.
Hi,
The Maharashtra goverment has come up with the new 1% VAT taxation for all the Flats Registration done on or after 1st April 2010. My query is before 1st April 2010, did the taxes for the sale of the Flats were borne by the builder? If yes what was the tax percentage? and also why the 1% VAT tax has now to be borne by the buyer? I am asking this question, because recently i did my flat registration and the builder has asked for the 1% VAT check in the name of the builder. Also my registration was supposed to happen on 26th March 2010, but the builder delayed it intentionally and pushed it to 9th April 2010. My query is by postponing my flat registration, does the builder gain in any way? for i know i am at loss as i have to now pay extra 1% VAT on the sale agreement amount.
Also can you please confirm if the VAT was applicable to builder earlier for building a township. For the builder never discussed about the VAT earlier during the negotiations, which means it was either included in the cost of the flat, or it was exempt for townships.
Your prompt response would be greatley appreciated.
Thanks.
as per low sale tax can not levy on immoveable properly is it constitution to levy this tax
Is it applicable to resale flats too?
the old method of computation at five per cent would be followed
IF anyone can please clarify the computation of 5%