Pay VAT or get ready to face legal action, builders tell buyers | mumbai | Hindustan Times
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Pay VAT or get ready to face legal action, builders tell buyers

mumbai Updated: Nov 09, 2012 01:41 IST
HT Correspondent

Failure in payment of value added tax (VAT) on the purchases made from June 20, 2006 to March 31, 2010 could invite legal action, builders across the state have warned buyers.

The builders have paid the amount to the sales tax department and want to recover it from the buyers. "We have issued reminder notices to those who are yet to pay. We want to them to pay the principal amount first, failing which we will proceed legally against them," said Anand Gupta, secretary, Builders Association of India (BAI).

Lalit Kumar Jain, president, Confederation of Real Estate Developers Association of India (CREDAI) and chairman and managing director of Kumar Urban Development Limited, said: "We are just asking for the money that we have paid to the government under duress. If the buyers don't cooperate, we will seek legal help."

In August, the sales tax department had issued a circular asking builders to pay 5% VAT along with penalty for the properties purchased from June 20, 2006 to March 31, 2010. The Supreme Court agreed to waive off the penalty if the amount is paid before October 31. Most builders have paid the money before the deadline.

Buyers, however, are not keen on paying the amount. "We have spent our savings on buying the flat. Paying VAT is out of question," said Anil Mishra, who has been handed over a bill of Rs4 lakh as VAT for his Malad house.

Activists feel that the consumers are being harassed. "The tax is aimed at harassing consumers. We are ready for a legal battle," said Mukesh Tyagi, a housing activist.

Vinod Sampat, a lawyer, said, "For years, builders have violated the housing and FSI norms. Buyers have always been putting up with their whims and fancies. Now, the buyers should ignore the notices issued by the developers."