Even as the sales tax department is computing the value-added tax (VAT) paid by 10,600-odd registered dealers or developers, a group of chartered accountants who have set up a forum of aggrieved flat buyers, is now asking them to demand VAT refund from developers.
The forum, which operates through a website called www.flatvat.com, have asked all the 450 buyers who have registered at the website to ask for a debit note or a tax invoice and receipt of the VAT amount collected by the developer. "The invoice and receipt confirms that the developer has paid tax to the government against your flat and will further help you get the refund in the future,'' said Sharad Patel, founder-partner of chartered accountants ASJ who set up the website.
The sales tax department is still computing the total VAT amount - it hopes to collect more than Rs 1,000 crore - paid by the registered developers. Official sources said that while majority of big developers have paid VAT, several small developers have shown nil returns. Dealers have to file sales tax returns every three months. The department is now in the process of verifying the reason as to why some developers have shown nil returns.
Incidentally, even before a buyer asks for a refund, Gundecha Builders, a suburban developer, has decided to refund the balance from the total 5% of the agreement value they have collected from their customers as VAT.
Paras Gundecha, chairman of Gundecha Builders, recently wrote to his 350-odd flat buyers asking them to collect cheques from his office or from the bank for the excess VAT amount. Gundecha, which has computed VAT between 1% and 3.5% of the agreement value, will refund roughly Rs 3 crore to the customers. "Barring very few buyers who have not paid, the majority of my customers paid the VAT amount in the form of escrow and bank guarantees. Now that I have paid that VAT to the government, I see no reason to hold on to the excess money,'' said Gundecha.
Another leading developer, who has projects mostly in Andheri and Borivli, said he too plans to refund the balance amount to his customers who have paid in bank guarantees and escrow in a few days. "But I am going to tell this customers that though I am refunding the money, they will have to pay in case the sales tax department comes up with another computation. I do not want more headaches," said the developer who refused to be quoted as he is in midst of a legal dispute with 30-odd flat buyers who have refused to pay VAT.