After failing to get any relief on Valued Added Tax (VAT) from the Bombay High Court, real estate developers are taking on consumer groups saying they are misleading people who bought properties between June 2006 and March 2010 by urging them to not pay the 5% VAT charged by the state government.

Around two lakh citizens in the city are likely to face the heat with the Confederation of Real Estate Developers Associations of India (CREDAI), too, saying VAT has to be collected from buyers. CREDAI also said consumer organisations are misleading people over VAT.

CREDAI-Pune Metro said concumer rights activist Sudhakar Velankar had contradicted his recent media statements by saying before the Bombay High Court that builders have the legal right to recover VAT from flat purchasers but in a judicious manner. President of CREDAI-Pune Metro Satish Magar said the PIL thus is line with their contention that VAT should be recovered from consumers.

Velankar, the founder-president of Grahak Hitwardhini had filed a PIL seeking a directive from the HC to the state government to adopt only one method of assessment, and until such time amend the Act allowing flat purchasers to pay the lowest assessable amount.

Velankar, on the other hand, countered that CREDAI is misleading the public as one of the contentions in court is that builders shouldnt collect VAT from customers.

Magar, however, said that in compliance with the interim order of the Supreme Court on payment of VAT most developers have filed returns with the government and paid tax. Magar said they are waiting for a response from the state government about lowering VAT from 5% to 1%. The matter was expected to be decided on Wednesday but had not come through.