Following instructions, builders in the city have started registering with the sales tax department of the state government.

Moreover, the Confederation of Real Estate Developers' Association (CREDAI) has reportedly decided to pay value added tax (VAT) of 1% from April 1, 2010 , while the matter of paying backdated VAT for the past four years from April 1, 2006 to March 31, 2010 is pending with the Supreme Court. The hearing is set for August 31.

The state has levied 1% VAT on builders from April 1, 2006. The builders were ready to pay tax from April 2010, but denied to pay VAT for the past four years and had moved the Supreme Court against the government's decision to pay backdated tax from 2006-2010.

There are around 350 builders in the city, out of which, around 204 builders are members of the CREDAI. The sales tax department had recently instructed the city builders to get registered and start paying VAT at the earliest.

"Most builders have already registered themselves with the sales tax department. We are ready to pay VAT from April 1, 2010. But the state has directed to pay backdated VAT from April 2006 to March 2010 and we have already moved Supreme Court on this issue. The builders have already sold out flats during this period and logically it will not proper to recover 1% tax from the consumers. This will be injustice to consumers," a member of CREDAI, told TOI on condition of anonymity.

"We have still not decided on the issue of paying backdated VAT as the issue is pending with the Supreme Court and hearing is to be held on August 31," he added.