5% Vat to be levied on flats bought between 2006 & 2010

The Maharashtra Govt has decided to collect VAT (Value added tax) from home owners who bought their under-construction homes directly from builders between June 2006 and March 2010.The value of VAT has been decided as 5% of the total agreement value. This amount will have to be paid before August 31st.

Eg: A buyer who bought a flat worth 2 crores from a builder between June 2006 and March 2010,will now have to pay 10 lakhs as tax before 31st August 2012.

This tax is not valid for resold apartments (flats bought from a previous owner).

Flats sold after April 2010  will be charged only 1% VAT and 3.75% Service Tax.

Note : There is No Service Tax or VAT levied on completed projects with OC (Occupancy Certificate).

Flats with more than 2000 sq ft or 1 crore price will be charged 4.5% Service tax along with 1% VAT.

Maximum amount of flats were sold between 2006 and 2010,when prices were at an all time high. Builders have been assigned the task to collect the money from the buyers.
Failure to do so will invite penalty.

A sales tax officer said that during the recent raids on builders, it was noticed that the builders had collected this money from the buyers but had not deposited it with the sales tax dept. The department expects to collect 800-900 crores by this.

Further clarifications on VAT on flat purchase:
VAT is liable on the total cost of construction of a flat or the agreement value,whichever is lower. So basically,if you purchased a 1000 sq ft flat and the construction cost is 1200 per sq ft,then the VAT you have to pay is 5% of Rs 12,00,000 i.e. Rs 60,000.

There is a further update on VAT on house purchases.
The govt is in consultation with various depts to come to a conclusion regarding the formula for calculating the VAT. Before any decision is arrived at, the builders should not harass buyers into coughing up 5% vat. In absence of any conclusion by the committee, the developers can charge between 0.5% and 3% VAT if at all necessary.

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Illegally \'redeveloped\' building in Vashi not yet demolished

The illegally redeveloped building in sector 9,Vashi is yet to be demolished. It helps to remind our readers that this 12 storied building in sector 9 was constructed on the spot of a CIDCO constructed society which was \’redeveloped\’. The commencement certificated for the building was revoked and a 1 month notice was served to the builder DG Shah. He was found to have submitted forged papers and had not got the required clearances from CIDCO. The CIDCO building was the Ashirwad JN type building. A total of 32 families were living in this complex before demolition. The builder had carried out more than 36-40 sq ft of illegal construction on each floor. The developer has apparently approached the court.

Ulwe villagers demand 20 crores per acre for airport land

A meeting with the villagers of Ulwe on 31 july,2012,ended without a resolution as villagers demanded an astronomical amount of 20 crores per acre or 40% of the surrendered land as compensation. Earlier, CIDCO had acquired most of the Navi Mumbai land from villagers at a rate of 12.5% of the acquired land. The govt had agreed to give them 22% of the land surrendered to CIDCO for the airport but the villagers refused. The villagers have been stalling all land acquisition since last September on this demand. There are 7 villages that are demanding this.
Its worth mentioning that the airport was supposed to be functional by 2015,but going the way they are and withdrawal of the environmental clearance by the forest dept of Maharashtra, its anybody’s guess as to whether the airport will ever see the light of day.

CIDCO to give height approval on behalf of Airport Authority

CIDCO has received provisional approval from AAI (Airports authority of India) to grant height approval for buildings up to a height of 75 meters in Ulwe. As Ulwe lies directly in the flight path of the upcoming airport at Ulwe, prior sanction from the Airports Authority is required before construction. Till now the approval had to be obtained directly from the AAI, which used to cause unnatural delays. On an average, AAI approval used to take 4-6 months, but now will be possible in 20 days. The final approval will be granted by AAI itself. This is the first time that AAI has given the authority to approve the height of a building to another agency.
The height of a building is the lowest closest to the airport runway and goes on increasing upto 20 km from the runway.
75 meters is roughly equal to a 15 storied building.
Therefore,clearances for buildings upto 15 stories will be provided by CIDCO.

Top builders raided for VAT evasion

The sales tax (VAT) dept of Maharashtra has conducted raids on top builders in the past 2 days and found tax evasion to the tune of 20 crores so far.The builders are supposed to collect this sales tax (VAT) from the flat purchasers and deposit it with the govt.The current rate of VAT is 1% on under-construction properties.Ideally,the flat purchaser should take a reciept from the builder for this.The reciept should have a VAT registration number.This is vital to assure that the buyer will not be left defrauded.
In this case it was seen that the builders collected this 1% from the purchasers,but didnt issue any reciept and kept the amount collected from the buyers.20 crores was recovered from the builders which included noted names such as Marathon, Ajmera, Keystone, Bhoomi realty, Naman and Acme,according to some reports.
Flat purchasers should insist on this reciept with the sales tax number.Without it,you can say goodbye to your money.

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