Mah builders to pass on VAT to buyers

Builders and developers in Maharashtra today said that they would pass on the liability of paying value added tax(VAT) imposed by the state government with retrospective effect, to the respective buyers.

August 27, 2012 / 10:07 PM IST

Builders and developers in Maharashtra today said that they would pass on the liability of paying value added tax(VAT) imposed by the state government with retrospective effect, to the respective buyers.


"The VAT will finally have to be borne by the customers along with expenses of registration and stamp duty," industry body CREDAI's secretary and chairman of Amit Enterprises, Kishor Pate, said.


The government intends to levy a VAT of 5% on constructions made between 2006 and 2010, which is resulting in an additional tax liability on flats, shops and bungalows sold by developers between June 20, 2006, and March 31, 2010.


CREDAI and other bodies had moved the Bombay High Court seeking relief in the matter but their plea was dismissed. The case is now pending in the Supreme Court.

"Earlier, VAT was proposed to be at 5% but was lowered to 1%, and has now been fixed at 5% after all. This will have an obvious negative effect on buyers, because developers are bound to pass the added cost on to them," consultancy firm Jones Lang LaSalle head for strategic consulting Subhankar Mitra said in a statement.

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