Office of the Commissioner cf Sales Tax, Vikrikar Bhavan, 8th floor, Room No.831, Mazgaon, MUMBAI-400010 .
TRADE CIRCULAR
No. Build-Devep/Adm.Relief.06-10/Adm-8 Mumbai, Date: 26.09.2012
(Trade Cir. 18T of 2012)
Sub: Certain clarifications regarding Annexures to be submitted by Developers.
Sir/ Madam/Gentleman,
BACKGROUND:
Trade Circular 14T of 2012 was issued on 06 August, 2012 to guide developers for obtaining registration, grant of administrative relief for unregistered period, and filing of return for period starting from 20/06/2006.
As per the earlier Circular instructions, the developer has to apply for registration and apply for administrative relief alongwith proof of filing of returns and payment of tax for unregistered period.
Now it is further stated that the developer who submits his returns or as the case may be, revised returns for unregistered or registered period, the developer shall submit year wise annexure showing the working of his tax liability.
This yearwise annexure will be for all the return periods ending up to 31¬10-2012 and will be in addition to returns to be filed by the dealers.
The format of annexure is made available on website of the Maharashtra Sales Tax Department www.mahavat.gov.in under download banner. The filled yearwise annexure is to be attached with e-mail and to be sent on builderscell@gmail.com e-mail id.
Needless to mention that the developers should first upload all their returns along with tax and then submit his annexures to builderscell@gmail.com
It is further clarified that, the Frequently Asked Questions IFAQs] regarding the tax liability and other issues displayed on website www.mahavat.gov.in under the banner of what’s new displays the following options provided under Maharashtra Value Added Tax Act, 2002 to enable the dealers to discharge his tax liability by selecting/ adopting any one of the options mentioned there-under:
From 20.06.2006 to 31.03.2010
1. Composition Scheme U/s 42 (3) – Under this scheme developer has to pay 5% tax on the agreement value. Land deduction is not available. Input tax credit is available subject to the reduction of 4 per cent.
2. Actual Expense Method U/r 58- Under rule 58, the deduction of Labour & service charges is available on actual basis. Land deduction is also available. Set-off will be calculated subject to the conditions u/r 53 and 54.
3. Standard Deduction Method U/r 58- Under rule 58, the deduction of land cost will be allowed. Thereafter, 30% standard deduction from remaining amount will be available as per proviso to sub-rule 1. Set-off will be calculated subject to the conditions u/r 53 and 54.
After 01.04.2010
The developers can opt for fourth option for any agreement registered after lat April 2010. Under this option u/s 42 (3A), developer has to pay 1% tax on total agreement value. No land deduction and input tax credit is available.
By selecting one of the option, the developer shall discharge his tax liability accordingly.
Some queries have been received regarding liability to be worked out on cost plus basis, i.e. cost of material and profit as per balance sheet. It is now clarified that no method apart from those statutorily prescribed and mentioned above in the rules will be admissible.
If any short payment is made by the developer by choosing other than abovementioned four options, the balance tax shall be recovered according to the provisions of law. In case of difficulties, the dealers are requested to approach the concerned Help Desk Officer.
This clarification cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.
You are requested to bring the contents of this clarification to the n tice of all the members of your association.
The government should make it clear to the builders and developers that the MVAT is not to be applied on consumers. It is the tax which the builder pays on the cost of construction after claiming set offs. Therefore, it must be treated as the cost of construction by the builder and not simply passed on to the flat purchasers as the builder is charging hefty rates in any case to the flat purchaser while selling the flats.