Fixed deposit for MVAT purpose

Q: Hi All, I have bought the flat in 5B building of Kalpataru Estates(Pimple Gurav) phase-2
Before giving possession the builder is asking all the flat owners to deposit 4% of property value as FD in HDFC Bank Sangavi Branch.
The Kalpataru flat owners have to unncessarily block INR 1 Lakh to INR 1.5 Lakh in the name of MVAT.
The FD will remain in the name of owner but power of execution will lie with Kalpataru Ltd.
What is the rate of interest given by HDFC Bank on this FD.What is the tenure for this deposit.
Is Tax at source deducted on this FD amount.
Are any other formalities required to be completed while opening a Fixed deposit for MVAT purpose.
Is anyone aware about the current status of the MVAT case pending in court.
Are other builders following the same procedure.

Ashwini Khopkar,

24th January 2011

Kalpataru Estate, Pimple Gurav, Pune

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Replies (7)

Hello Friends, I am another owner of 4A-901. I am about to get possession on coming weekend however unfortunately they never mentioned @ depositing any amount with HDFC as FD...

Rohit Joshi,

20th April 2011

Comment

Even I faced the same issue when I contacted them to finalize the possession date for 4B-602. At that time only they mentioned 4% MVAT amount which we are supposed to deposit before taking the possession. I am not very sure if the demand is authentic and why it had not been conveyed while we're booking the flat.
Can someone confirm with other flat owners if they have deposited the same amount before taking the possession?

Chandrashekhar Sangwar , Apartment Resident

18th April 2011

Comment

The same is the case with me. Kalpataru management is not giving wring about how they will use 4% amount if they do not have to pay to govt. Also they do not want to give in writing why they are blocking such a huge amount when it is not required at all? The entire communicatuion feom Kalpataru is suspecious as they are just orally telling to individuals and got sending any written Communication.

Sat Par, Mumbai

10th May 2012

I am planning to buy a property at the top floor of 6B, can any one advice about the things i need to take care of. Thanks

Sajith Chakkingal, Apartment Resident

15th February 2011

Comment

I am resident of 6B-602 and I went through the process of creating FD with HDFC Sanghvi branch for MVAT. ROI is as per Bank Standards whatever is currently applicable. When I took possession it was around 7.5%. Additionally I paid around 10k of service tax, as builder charges Service Tax on % of remaining work at the time of purchase.

Himanshu Shrotri , Apartment Resident

27th January 2011

Comment

Hi All,
I have bought the flat in Kalpataru Estates(Pimple Gurav, Pune) phase-2. I did the registration of my flat in 2009. As per the last letter from Kalpataru Construction, I paid all the dues and went to their site office for possession. On reaching their, I came to know from the staff that I have to make FD of 4% towards provision of MODVAT/Service tax liability. They refused to give me in writing the reason for the amount, or information regarding how this amount will be used in the future, and will it be refunded to me in case they do not have to pay the government. They just want to communicate it verbally or over phone. I am very sceptical about the intention of demanding 4% amount since there in no transparency. Reputed builders like Hiranandani is asking for just 1% through written comminication. So why Kalpataru is asking for 4% and also not communicating it in writing.

Did anybody got letter from Kalpataru for 4% amount?

Sat Par, Mumbai

10th May 2012

I just enquired from my friends who have booked flats in 2008 with other builders like Mount Vert(WAKAD).He is not charging them for MVAT.He is charging some additional service tax which amounts to INR 30,000 to 40,000.
Same information I got from my husband's friend who has booked flat with Kumar Builders and has already taken possession for that flat without paying MVAT as case is still pending in courts.

Ashwini Khopkar,

27th January 2011

Comment

Yes you would have to put aside 4% of the agreement cost as an FD for MVAT, if you registered before 1st April 2011. Your agreement has a clause for the same. You can confirm the same with anyone who has already taken possessions in 6a/6b/6c/5a/5b/5c.

Regards,
Sandesh K

Sandesh K, Apartment Resident

24th January 2011

Comment

I also paid the entire amount as per their letter. But at the time of possession Kalpataru Construction told me to make a lean FD of 4% of the sales amount. I have sent then about 12 mails to explain them the reson for this amount and how they are going to use them, and whether they will return it in case they do not need to pay the complete or partial amount to the govenment. None of the staff (including General Manager of Kalpataru construction) are ready to reply my question through email or in writing. It appears that they do not want to make it official and make custome pay through their nose without official communication. At least they should give us in writing whether they will be returining our amount in case they do not need to pay to the government. There is no transparency at all in this transaction and I am not sure how safe is our money with the builder. Can somebody guide us on this matter.

Sat Par, Mumbai

10th May 2012

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