VAT on property - who is liable to pay


I have purchased a flat in resale from a seller in May2012 and got transferred on my name by the builder. In Aug2013, builder has done registry of the flat. Now builder sending VAT demand of 1.05% of value of agreement to sale. 1. Am I liable to pay the VAT demand ? 2. If yes, on what value of flat it will be calculated ?

Answers (1)


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A builder cannot charge Value Added Tax (VAT) on transaction for sale of flat effected after he has secured completion certificate for the project from the municipal corporation, the Pune district consumer disputes redressal forum has ruled.
In an order passed on Thursday, a three-member bench of the forum, headed by its president V P Utpat, held city-based construction firm, Kshitij Promoters and Developers in Erandwane, liable for deficiency in service and unfair trade practice for wrongfully collecting 1% VAT from the purchasers of a flat and not returning the same.
The bench, which also comprised members Mohan Patankar and Kshitija Kulkarni, directed the firm and its partners, S P Paranjape and Vinayak D Gokhale, to refund the Rs 70,230 VAT that was collected from complainants Janice D'sa and Leena D'sa within six weeks from the date of order. The firm has also been ordered to pay Rs 20,000 compensation to the complainants towards physical and mental agony.
The construction firm had secured development rights for a land at Pashan and got a building plan approved by the Pune Municipal Corporation (PMC) on March 28, 2007.


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