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Vat on property by urd

Sandeep (Others) (26 Points)

08 November 2012

Hello Experts, Please suggest on my below situation- At the time of my flat registration (on 25th Mar-10) builder was not having VAT/TIN no. but now he has registered and got TIN no. in this year (somewhere around Mar-Apr'12). So can he now eligible/legal to ask for backdated ie 5% VAT on my flat which was registered in Mar-2010 when he was unregistered dealer, irrespective of whatever causes he has included in my agreement (like buyer will be responsible for any VAT or other tax applies in future). Please inform if any more details required to get more clarification on this. Thanks in advance.... Regards Sandeep

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4 Replies

MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 08 November 2012

Mr Sandeep,

The builder has to pay tax to the department if his receipts cross the threshold mark(minimum required for registration)in the earlier priod.Although the builder did not register in time the tax department can collect VAT on the undeclared turnover also.It depends upon the both the builder and the department officials. However, you can ask the builder to issue an invoice for collection of VAT,which they generally avoid. Most of the times the builder may not declare past receipts in his returns and pay tax.So,you can insist on paying VAT on the payments made by you after his registration under MVAT Act only and see his reactions.....MJK

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Sandeep (Others) (26 Points)
Replied 09 November 2012

Thanks a lot sir, this is very useful. Can you please also guide me the source/link to get some GR/circulars from where I can get some supporting docs related to "backdated VAT can not be collected" or "VAT not applicable/collected on transactions done by builder when he was non registered though he is registered now or something like that. Appreciate your help and guidance. Thanks Sandeep

MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 09 November 2012

Mr Sandeep,

Under all VAT Acts in India only a registered dealer is authorised to collect taxes, and that also by issuing a proper tax invoice as specified(with necessary details) therein.So,during unregistered period one can not collect VAT on his sales. This VAT collected should be at the correct rates and it should be declared and paid to the govt,within a fixed period,say a month or quarter, through returns. If these steps are not complied with the govt will levy penalties,interest and it can also sue such violators in a court of law.But, if the govt gets information that a person has done some sales in any period above the minimum limit required for registration they can levy tax ,penalty and interest in addition to prosecution. These provisions are avilable ,spread out in varios sections and rules, under each VAT law in India..........MJK

Sandeep (Others) (26 Points)
Replied 10 November 2012

I guess this is very much cleared now, thanks for your quick reply. Will surely get back to you on this topic if any more clarification required in future. Thanks a lot...:-)