Rate of tn vat on flat under construction

I booked a flat under construction in Chennai (Tamil Nadu) during January 2010 for Rs. 28.13 Lakh, by availing home loan from a bank and paying the pre EMI interest till date as the builder has not yet handed over the flat. Bank is disbursing the payments as per the Demands raised by the builder.
 
At the time of booking, the VAT rates were 4% & 12.5% (as the case may be) and the cost sheet was prepared and demands (raised before 12.7.2011) were paid for Rs. 24.71 lakh (inclusive of VAT in old rates). W.e.f 12th July 2011, VAT rates were revised to 5% & 14.5%. Now, the builder is charging the revised VAT rate for the whole project cost even for the Demands raised before 12.07.2011 stating that the transaction is not over as the flat is not yet handed over and hence, they are liable to collect the VAT at the revised rates for the whole project cost.
 
Kindly clarify whether--
 
I need have to pay at the new rate of VAT even for the demands raised before the cut-off date of 12.07.2011
 
(or)
 
VAT at the old rates for the demands raised upto 11.07.2011 and at the new rates for the demands raised after 11.07.2011.

Replies (1)

 though i am not sure... the builder is not liable to ask us for revised vat difference . the logic which seems to me is the vat rates are applicable as and when the same come in to force.... so he ideally should not charge you for prior period..

also you pls refer the agreement if there is any caluse in this regard if yes the matter is clear...

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