VAT bomb on the home owners!

By Accommodation Times Bureau

Bombay High Court has dropped a bomb of VAT (Value Added Tax) on the home owners. The
notice was circulated by the builders to the owners following a ruling by the High Court. The
state government too issued a circular to developers for the pay of VAT.

VAT is obligatory for every house,plots, bunglows that are sold between June 20, 2006 and
March 31, 2010.

The state later reduced the VAT on the sale of flats to 1% from April 1st 2010, but still the
government is crunching the tax the rate of 5% making difficult for the buyers.

The VAT blow is not only a strain on the buyers but also the builders that are already struggling
with the present volatile industry. Hence, the developers now collecting the due VAT tax from
the owners.

Every buyers has to pay the 5% VAT also interest at the rate of 15% and penal interest at 25%
rate if the due period is over. The buyers are getting anxious who are already paying service tax
of 3.09%.

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2 thoughts on “VAT bomb on the home owners!

  1. If Government is increasing this kind of bombs on comman middle level person then he will never develop, he will crunch in this mess,
    and we never discover ourself
    since flats cost are rising up day by day, and this service tax load comman man cannot bear this.
    Government should consider this

  2. The building that I lived in was old and dilapidated.  We are part owners of the property. We went in for redevelopment. The builder had agreed to give us “double our carpet area” in lieu of our rights in the land.  Accordingly the stamp-duty was paid and an Agreement to this effect was signed at the end of December 2010. However it was not registered as the Builder had not got the C.C for the construction of our floor. Now that the building is nearing completion we want to register the said Agreement. I want to know if VAT has to be paid when we go to register the Agreement??? And if it is applicable then why is it applicable because we are NOT buyers.

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