Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: VAT Audit :: list of goods taxed at 4% :: cpt :: empanelment :: articles on VAT and GST in India :: form 3cd :: ACCOUNTING STANDARD :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
VAT (Value Added Tax) »
 Shops cannot charge VAT on discounted items: Consumer forum
 Delhiites have to pay lowest taxes as AAP govt announces cuts on VAT on various items
 Tamil Nadu minister justifies VAT hike on fuel
 State Government urged to withdraw hike in VAT on petrol, diese
 High VAT may encourage illegal trading
 Delhi budget unlikely to have any new tax proposals this year
 Date for filing quarterly VAT returns extended
 Framing of Central Assessments - Dated 2-2-2017 - VAT - Delhi
 CENVAT Credit (Amendment) Rules, 2017
 VAT to Give Way to Consumption Tax
 Import stage VAT under new VAT law

VAT could lead litigation between builder and buyer
November, 09th 2012

With the high court recently dismissing petitions seeking to stay the state government's order to levy Value Added Tax (VAT) on under-construction properties, builders are now planning to send their customers notices to cough up the extra amount.

The tax is now applicable from 2006, but in many cases the properties were sold without VAT being charged. Now as the builders have to meet their liability towards the taxman, they will be knocking their buyers' doors to raise the amount. VAT, being an indirect tax, will be passed on to the consumer.

Most of the transactions were done without passing on the VAT liability to the buyer but now the amount will have to be recovered from them. "The builders are also apprehensive that buyers may be reluctant to shell out the amount. It could lead to litigations," said Sunil Duddalwar, the president of the Nagpur branch of Confederation of Real Estate Developers of India.

VAT is applicable to all types of properties but those having brought homes may especially find it difficult to now shell out the tax amount. "Buyers in this class mainly depend on loans often stretching their means to the optimum limit," said Tejinder Singh Renu, secretary of the Vidarbha Taxpayers Association and also a builder.

The average ticket size of the flats in West Nagpur ranges from Rs 50 lakh to Rs 1 crore. "With the average rate of VAT estimated at 3%, a buyer will have to shell out another Rs 1.5 lakh to Rs 3 lakh for the property purchased after June 2006 from when the tax has been made applicable," added Renu.

The mid-priced flats coming up in the outskirts range from Rs 20 to 45 for which VAT comes to around Rs 60,000 to Rs 1.3 lakh. "The amount is considerable indeed for the class of buyers going for homes in these areas," said Renu.

It is a peculiar situation as the order to levy VAT issued on 2006 is itself being heard in the Supreme Court after being challenged, and governments of Maharashtra and Karnataka are respondents. The state government in 2010 came up with an order to collect the tax which would be repaid with interest if the case was lost in apex court. "This order too was challenged through various petitions in the high court, which have been now turned down," said Renu.

There are chances that buyers may deny paying the tax citing the grounds that the case is still pending in the Supreme Court.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions