Vat demand on under construciton flat purchased in 2008
Silent victory
(Querist) 24 September 2016
This query is : Resolved
My Builder still follows up for VAT on a flat that i purchased and occupied in 2008
Facts are as under
1. Agreement signed in 14.2.2008 and
given on 12.12.2008. possession was
unconditional
2. Agreement does have a vague clause that any service tax or any other tax even in future will be paid by purchaser . However there is no fixed amount agreed
3. First demand was served in 14.12.2012
which was without any backup or
comuputation and without his VAT
regn no etc.We declined and asked
VAT comuptation
4. Second Demand was in 19.5.2015 after 2.5 years . This time a notice but without backup
5. Third demand was on 2.9.2015 this time he admitted claiming VAT under Sec 58 but no computation against ec 58 1 A and importantly 1 B that allows 55 % deduction depending upon agreement date
Question
1. Can he file a summary suit after so
long
1. Since he asked first in Dec 2012 and
we declined to pay does not right to
sue first accure in Dec 2012 ? is
this not time barred by limitation act
3. Whould a summary suit hold in absence of any firm debt amount agreed or a proper invoice / proof of having paid vat
rajeev sharma
(Expert) 24 September 2016
YOUR QUERRY REQUIRES EXAMINATION OF ALL DOCUMENTS EXECUTED BETWEEN YOU AND BUILDER.MOREOVER IT SHOULD BE ASCERTAINED WHETHER ANY DEMAND OF VAT HAS ACTUALLY BEEN RAISED BY THE CONCERNED DEPARTMENT.
Raj Kumar Makkad
(Expert) 24 September 2016
Better to get the advice of local tac lawyer by sending the relevant documents.
Rajendra K Goyal
(Expert) 24 September 2016
Ultimate liability to pay VAT is on the purchaser.
To find out the liability whether time barred, all document need to be referred, discuss with local lawyer.
Kumar Doab
(Expert) 24 September 2016
Local counsel can help you.
Raj Kumar Makkad
(Expert) 25 September 2016
This is good news for those who have bought property between June 2006 and March 2010. The Supreme Court on Thursday said Value Added Tax (VAT) cannot be imposed on buyers.
This has come as a jolt to builders in the state who wanted 1% tax instead of 5% imposed by the state government in 2006. They were recovering the VAT amount from buyers.
Justice RM Lodha upheld the Bombay high court order that VAT cannot be imposed on buyers.
“The value of goods which can constitute the amount to be taxed has to be the value of the goods at the time of incorporation of goods in the works even though property in goods pass later. Taxing the sale of goods element in a works contract is permissible even after incorporation of goods provided tax is directed to the value of goods at the time of incorporation and does not purport to tax the transfer of immovable property,” the court observed.
The court also directed the Maharashtra government to bring clarity in Rule 58 (1-A) — relating to VAT rules.
“We respect the Supreme Court verdict but we will study the judgment only after we get a copy. The taxes imposed by the government have always been passed on to the buyer. We will not pay from our pocket,” said Sunil Mantri, vice president Naredco, CMD Mantri Realty.
“Imposing 5% VAT under section 42(3) of MVAT on flat purchased during June 20, 2006, to March 2010 would impact consumers. The SC verdict will lead to disputes between developers and buyers,” he added.
Builders’ association CREDAI had approached the apex court after the Bombay high court rejected their plea to impose only 1% VAT. In 2006, the state government imposed a VAT of 5% on constructions made between 2006 and 2010. The move resulted in an additional tax liability on flats, shops and bungalows sold by developers between June 20, 2006, and March 31, 2010.
“Whatever VAT amount the developer has recovered, will now have to be returned to buyers with interest,” said a consumer activist. “If they don’t, then we will move court.”
Advocate general’s stand
The apex court recorded the statement of advocate general of Maharashtra that clearly stated that implementation of Rule 58(1-A) shall not result in double taxation and in any case all claims of alleged double taxation will be determined in the process of assessment of each individual case
Rajendra K Goyal
(Expert) 25 September 2016
Repeated query:
http://www.lawyersclubindia.com/experts/Vat-on-under-constrution-property-final-amount--617621.asp
Kumar Doab
(Expert) 25 September 2016
Why to repeat?
Expert Mr. Makked has posted a very relevant input.
Rajendra K Goyal
(Expert) 11 October 2016
Can get benefit from the input provided by the expert raj kumar makkad ji.
Kumar Doab
(Expert) 11 October 2016
The author is silent.
The query may be deemed as resolved/closed.
