1% VAT taxation in Maharashtra for Flats Registered

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Hemant

Project Manager

21 Points Posted on 13 April 2010

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.

Replies (3)

CA Sudeep Yadav

26 Points Posted on 04 November 2011

1.Firstly the builder does not gain any thing by charging u 1 % VAT ...

2.Since ur flat reg. was delaided to be reg. after 1.4.2010, u r liable to pay 1% VAT on The amount that is in the agreement .

The builder has to pay the vat amt to the govt. whatever he collects ..

3.And VAT was not borne by the builder before 1.4.2010.( I guess the % before was 5% , which most builder neglected to collect and even did not registered to get their TIN no. )

One important thing if ur flat is reg. on the date after the builder has recd the completion certificate i.e.
for eg. Reg. date =9th April 2010 and Completion certificate date = 5th april 2010 ...
then the builder must not collect VAT .. and if the builder collects VAT.

In the above example and the VAT amount is not mentioned in the sale agrement then that amount will be his profit and he gets a chance to escape from payiny it to govt.

Till dat i know this much but there is still a debate btwn the date of Completion Certificate And Occupancy certificate.

But still u need more information on above ..