City developers commit ₹475 cr as VAT under tax amnesty scheme

The Haryana Alternative Tax Compliance Scheme for Contractors, 2016, which closed on December 13, not only got an overwhelming response from real estate developers in Gurgaon, but it also brought a revenue windfall for the resource constrained Haryana government.

The Haryana Alternative Tax Compliance Scheme for Contractors, 2016, which closed on December 13, not only got an overwhelming response from real estate developers in Gurgaon, but it also brought a revenue windfall for the resource constrained Haryana government.

FOR GURGAON ROADS PACKAGE ONLY - Gurgaon, India- June 30: A view of the Golf Course Road, in Gurgaon, India, on Tuesday, June 30, 2015. (Photo by Parveen Kumar/Hindustan Times)

Over Rs 475 crore has been committed by around 120 developers and contractors in Gurgaon to be paid as value added tax (VAT).

The excise and taxation department has already received the first tranche of around Rs 100 crore, excise and taxation officials said. Ninety developers in east zone have committed to pay Rs 360 crore as VAT whereas Rs 115 crores will be paid in the west zone by 30 developers.

The Haryana Alternative Tax Compliance Scheme for Contractors, 2016, was launched as an amnesty scheme for the recovery of tax, interest, penalty or other dues payable under the Value Added Act, 2003, for the period up to March 31, 2014, and earlier.

According to the scheme, the contractors and developers calculated and declared their year-wise liability under this scheme and paid 25% of the total amount due with the application. The balance 75% has to be paid in three quarterly instalments, each payable within 15 days of the end of the next quarter without interest.

The tax compliance scheme not only helped the government mop large amount of revenues but it also brought to end pending litigation as several cases had been filed by developers, who claimed the demand raised by government was unfair.

“This scheme has helped in timely realisation of much needed revenue, and also reduced litigation,” said SPS Chauhan, deputy excise and taxation commissioner, west Gurgaon.

Prior to this scheme, confusion prevailed as there was no clear direction from the government regarding the rate of VAT to be charged from developers. Several buyers complained that they were being asked to pay almost 5 to 6% of sales value as VAT.

In case, if the apartment buyers have been charged more than 1.05% as VAT, then they will be refunded the amount or it will be adjusted towards purchase in property.