By Accommodation Times Bureau
MUMBAI, August 27, 2012: Seeking to fight the vexed VAT issue on flats in Maharashtra, a consumer group called FORAM – Flat Owners’ Rights protection Action committee in Maharashtra – has been formed with consumer interest groups coming together.
FORAM will mobilise public opinion against the VAT on flats sold between 2006 and 2010 which has come like a bolt from the blue, said Mr. Atul Puranik, convener of the new platform.
“As it is, the common man is burdened with a series of taxes and a homer buyer has to pay even much more in terms of service tax, stamp duty and registration and now the VAT,” Mr. Puranik, who is associated with the Council for Fair Business Practices, pointed out and called for an immediate end to VAT on housing sector.
FORAM received support from elected representatives like Mr. Vivek Patil, MLA from Uran. Many consumer rights activists and advocates promised to lend a helping hand to the anti-VAT drive.
“I was shocked to read about the Maharashtra Government’s announcement to charge VAT at a high rate of 5% on flats and other properties bought from 2006 to 2010,” said Mr. Patil commenting that: “I strongly feel it is very, very exorbitant.”
“Several people who chose to buy flats in Raigad district because of the price advantage as compared to Mumbai and its suburbs have approached me with this new VAT issue. “My fundamental question is: why should there be VAT on immovable property? VAT should totally be scrapped be it 1% as applicable from April 1, 2010 or the high rate of 5% from 2006 to 2010,” Mr. Patil said.
Mr. Puranik said there is no justification for levying axes on the material used in housing since all these items are subjected to sales tax. VAT, actually, amounts to double taxation, he said.
“What is more, flat owners pay annual property taxes to local governments,” he pointed out and appealed to the government to think twice before squeezing the Aam Admi who is under tremendous pressure due to inflation, job losses, economic slowdown, apart from taxes at e very stage of his life.
Mr. Puranik said: “This VAT burden is just too much. The high rate 5% VAT plus the penal interest is going to cripple the common man further. This is in addition to the service tax of 3.09% and the ever increasing property tax.
Echoing similar views, Mr. Patil pointed out that the common man is being “crushed” by the government policies both by the central and state Governments. “The uncontrolled increase in prices of essential items like food, electricity and petroleum products, along with taxes on everything that we buy had made the life miserable for many,” he said.
“What is even strange is that the government is literally squeezing the honest tax payers. It has become very easy for the government to catch hold of the honest people whose data they get through registration etc,” he argued.
Demanding on behalf of the common man that the government must immediately withdraw VAT on flats, Mr. Patil said: “Food, water, clothing and shelter are the basic needs of all of us and the government should make them affordable.”
“The government talks of affordable housing but their action have only increased the cost of flats,” he said and asked: “How can housing be affordable with such unaffordable taxation?”
He said that “the common man is the ultimate sufferer because the taxes are passed onto the buyer. For example even if we buy a pizza or eat in a restaurant, we the consumers have to pay VAT and not the hotelier or the shop keep dues.”
“We, therefore, appeal to the government to scrap VAT on sale of flats altogether and give much-needed relief to the customer,” he added