Newly formed FORAM’s convener Atul Puranik feels that 5% extra vat, which is to be charged on properties sold between June 20, 2006 and March 31, 2010 by Maharashtra government amounts to double taxation since the developer has already paid while buying them from registered suppliers.

FORAM-Flat Owners’ Rights protection Action committee of Maharashtra sought the advice of advocate and tax law consultant Anand Patwardhan in this regard.  “Patwardhan’s view is: In such a situation, why should the government charge VAT again on developers who ultimately pass it on to the consumer like it happens in any transaction,” Puranik said.

According to Anand Patwardhan that developers include VAT also while fising the prices of falts and it should be challenged. .

Patwardhan also opined: “To the best of my knowledge, VAT will be applicable on sale/resale of goods under the sale of goods act. Builders will have to declare and explain the cost of material that has been used before working out any formula of collection of VAT from buyers.”

The Sales Tax department had issued a trade circular calling for payment of 5% VAT on properties sold between June 20, 2006 and March 31, 2010 following the dismissal of a developers’ plea against VAT by the High Court. Now, the Supreme Court, hearing a special leave petition by developers, extended the deadline to October 31, 2012 instead of the government deadline of August 31. Source : Track2realty