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Builder now demands that 5% VAT is payable on agreement

Q: I have booked a under construction flat in central suburbs in Mumbai and registered the agreement. The builder has now demanded that 5% VAT is payable on agreement value or market value, whichever is higher on agreements registered between 20th June 2006 and 31st March, 2010.
Can any one throw some light and authenticate whether this is really payable. What about agreements registered subsequent to 1st April 2010, is VAT chargeable.
Regards, James G

Reply

Replies (5)
1
As far as I know VAT is applicable for all sales deed..
Nandakishore


2
I heard now some thing called as "Labour Cess" too is being asked by developers as per govt directions.
Adesh


3
Yes, you have to pay the VAT & Service Tax as requested by the developer. This amount is to be deposited by developer with the govt. hence it's mandatory for all buyers to pay.
Kunal


4
No doubt, VAT is payable on the apartment cost at 5% composition rate and ST at 2.5% composition rate .
rohit_marathi


5
VAT and Service tax of the agreement value are paid by builders. So, you would not have to go through the hassle of paying it. It would be uninformed to assume that the builder would absorb this burden and pay the tax.
Thinkal


6

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