H'yana govt approves lumpsum composition scheme for developers

  • PTI, Chandigarh
  • Updated: May 14, 2014 21:20 IST

The Haryana government on Wednesday approved an optional lumpsum composition scheme for developers engaged in construction of building and flats for sale.

A decision to this effect was taken at a meeting of the State Cabinet, which met under the chairmanship of Chief Minister Bhupinder Singh Hooda.

The Cabinet also gave approval for revising the lumpsum rate for work contractors other than developers and revising TDS rate from four per cent to five per cent under the Haryana VAT Act 2003, according to an official release.

The developers opting for the lumpsum scheme would be required to pay lumpsum tax at the rate of one per cent on total value of consideration received by them by treating them as non-VAT dealers.

They will not be eligible to claim any input tax credit nor entitled to claim any refund or issue any tax invoice.

Under the Value Added Tax 2003, the developers who are engaged in construction of buildings and flats and sale thereof are liable to pay tax as work contractors.

However, they were finding it difficult to calculate the correct tax liability and to charge VAT from the buyers, the Cabinet meeting was informed. There has been request from the developers in the state to float a lumpsum scheme in Haryana for this purpose.

Further, Haryana Value Added Tax Rules, 2003 contains an optional lumpsum composition scheme providing tax rate of four per cent for work contractors. This four per cent rate scheme was introduced when the lower tax rate was four per cent under the Act.

Now when the lower tax rate stands revised to five per cent from February 2, 2010, the present tax rate of four per cent for work contractor has been revised to five per cent, the release said.

The payment of tax by work contractor has to be made monthly instead of quarterly. The period of 90 days given to a contractor to opt out from the lumpsum scheme has also been revised to 15 days.

In another decision, the Cabinet also approved entrusting of approval work to committee of officers instead of an individual officer to check any misuse in issuing refunds to the dealers under the Haryana Value Added Tax Act 2003.

To check any misuse of power by an individual officer, a committee of officers has been constituted to approve refunds at the range and district levels on the pattern of the committee already constituted for approving refunds above Rs 25 lakh.

For the refunds above Rs 25 lakh, a committee already stands constituted comprising of three senior most Additional Excise and Taxation Commissioners.

In yet another decision, the Cabinet approved an outlay of Rs 200 crore as grant-in-aid to the Panchayati Raj Institutions in the State for the financial year 2014-15.

The grant-in-aid would be distributed among identified villages on the basis of need to fill up the critical infrastructural gaps.

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