Chief minister not in favour of extending VAT payment deadline

Chief minister Prithviraj Chavan is not in favour of extending the deadline for paying value added tax (VAT) or reducing the tax rate on flat purchases as he does not want to cross swords with higher courts that have decided the matter. Also, he thinks any extension or reduction in the tax rate, if granted, would be seen as being a pro-developer move.

Chief minister Prithviraj Chavan is not in favour of extending the deadline for paying value added tax (VAT) or reducing the tax rate on flat purchases as he does not want to cross swords with higher courts that have decided the matter. Also, he thinks any extension or reduction in the tax rate, if granted, would be seen as being a pro-developer move.

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Sources at the Mantralaya also said Chavan did not commit anything at Wednesday’s Cabinet meeting in which finance minister Jayant Patil suggested that the tax rate could be reduced to a flat 1%. Chavan said a group of ministers should be set up, if required, to work out any anomalies in implementing the decision and to ensure buyers were not harassed. Flat buyers have accused builders of highhandedness.

The state sales tax department has asked builders to pay 5% VAT plus a penalty on purchase of properties between June 20, 2006, and March 31, 2010.

A senior official told HT that the rates, after assessment of various properties, would not exceed 3.05%. “We expect a minimum rate of 0.75%, depending on where the property is located and costs such as land price and labour payments are deducted from the total cost of property.”

“Chavan is not in a hurry to disturb the legal process. He would like the matter to be resolved in a legal manner,” said a senior bureaucrat.