According to the news sources:The commercial tax officials argued before the court that the benefit of composition under the Act is confined only to those dealers, who first construct and then sell residential apartments, and not to those who commence construction, execute a registered deed for the sale of a semi-finished structure, and thereafter complete construction of the apartments. After perusing the provisions of the Act and contentions of the petitioners and the authorities, the bench held that the contentions of the authorities are not tenable.
The court was disposing of a bunch of petitions filed by several real estate developers who were scrutinizing the foreswearing of the benefit of composition under Section 4(7)(d) of the Act. Composition scheme aims at providing relief to some businesses from the need to keep detailed records. It provides for a simpler method of accounting for VAT.
The Hyderabad High Court has held that the benefits of tax exemption under the AP VAT Act ought to be given to all classes of real estate developer and designers, if they opt for composition scheme.