Do we still have to pay the 5% VAT?

Q: I have bought a flat in Casaulitma Thane "B" wing in March 2009 and registered in the same May -2009. I have received a letter from Lodha about 5% VAT and it is to be paid within 15 days of the receipt of the letter or else it will attract some additional interest. Although we registered in March 2009 but had made very little payments until march 2010 (after which the VAT was slashed to 1%). Do we still have to pay the 5% VAT or should it be charged as and how the construction progresses?
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Ashwani, Apartment Resident, Mumbai

28th August 2012

Property Tax in Mumbai

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The government said that VAT will be levied only on the cost of building material and not on the cost incurred on labour, engineering, architecture and construction services.

akshay, Mumbai

29th August 2012

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It is mandatory for all buyers to pay the VAT & Service Tax as requested by the developer as this has to be paid by developer to the govt.

maneesh, Mumbai

28th August 2012

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Hello Ashwani, VAT on flats registered between 20/6/2006 to 31/3/2010 must be paid as directed by builder. After April 2010, VAT under 1% composition is followed. Before April 2012, service tax is 2.575%.

poonam, Mumbai

28th August 2012

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