Real estate players oppose Haryana's move to claim VAT
June, 27th 2013
Real estate players have opposed the Haryana government's move to make builders, developers and promoters of housing projects liable to pay value added tax (VAT).
Haryana excise and taxation minister Kiran Choudhry had on Tuesday revealed intentions of the state government to bring developers, promoters and builders under the ambit of VAT. However, according to National Real Estate Development Council, a body of stakeholders involved in real estate activities in the country, the state excise department had issued a circular on May 7 imposing VAT on builders and developers of flats and buildings in Haryana.
In a recent representation to the minister, director general of the council, Brig (retd) RR Singh said, "Imposition of VAT on flats and buildings is unjustified and may lead to additional burden on contractors and developers and also become subject matter of litigation."
"Builders in Haryana are already paying VAT.... on purchases and contracts undertaken for their projects in the state. They, therefore, cannot be subjected to double taxation. VAT is not at all leviable on construction of flats or apartments by developers in Haryana. This will turn out to be an anti-development measure for the state as VAT has not been imposed in any other state in addition to the stamp duty," Brig Singh claimed.