Property buyers in Maharashtra get more time to pay VAT dues
August, 31st 2012
The Supreme Court has given some relief to buyers and developers by extending the deadline for payment of dues of value-added tax (VAT) on flats purchased in Maharashtra from 2006-2010 to October 31 from the earlier August 31.
It has also directed the Sales Tax Department to waive 15 per cent interest on the dues and penalty if all sales between the period are registered by October 15 and the outstanding amounts of VAT paid by October 31, 2012.
The order follows the hearing of an application filed in the apex court by Credai Pune Metro this July, seeking a stay on the matter.
In early August, a trade circular issued by the State Sales Tax Department had caught both developers and buyers by surprise. It said that 5 per cent VAT had to be paid with retrospective effect for properties purchased between June 20, 2006, and March 31, 2010, by August 31, 2012.
Interest at the rate of 15 per cent was also to be paid on the dues, failing which, a penalty was to have been imposed.
Rohan Pate, Director, Amit Enterprises, said that the deadline extension will help in compiling data and collecting dues from customers.
According to builders, though the VAT payable is set at 5 per cent, there are several offsets provided and the calculation of the exact amount to be recovered from buyers is a complicated process that lacks clarity.
Anirruddha Deshpande, Managing Director, City Corporation, which is building the large, integrated Amanora Township at Hadapsar feels that the government should simplify the process and levy a 2 per cent charge on all purchases.
Nearly five lakh buyers from the State are affected by the recent circular demanding VAT be paid.