Mumbai: Harried property buyers in Maharashtra have formed an action committee to protest against the proposed collection of VAT arrears by the state government for all kinds of properties bought between 2006 and 2010, a representative said Monday.
Seeking to fight the vexed Value Added Tax on properties in Maharashtra, a consumer group called FORAM - flat owners' rights protection action committee in Maharashtra - has been formed with consumer interest groups coming together.
FORAM will mobilise public opinion against the VAT on flats sold between 2006 and 2010 which has come like a bolt from the blue, said Atul Puranik, convener of the committee.
"As it is, the common man is burdened with a series of taxes and a homer buyer has to pay even much more in terms of service tax, stamp duty and registration and now the VAT," Puranik told media persons here.
Maharashtra residents who purchased property between June 2006 and March 2010 will now have to pay a VAT of five percent, along with an interest of 15 percent per annum and 25 percent penal interest, said an official of the Confederation of Real Estate Developers' Association of India (CREDAI).
He explained that the Maharashtra Chamber of Housing Industry had challenged the state government's move in 2009, but it lost the case in the Bombay High Court.
The sales tax department had then issued orders and made it mandatory for anyone who bought a property between June 20, 2006 and March 31, 2010 to pay the higher VAT.
Puranik, however, said there is no justification for levying taxes on the material used in housing since all these items are subjected to sales tax. VAT, actually, amounts to double taxation, he said.
FORAM aims to mobilise public opinion from all over Maharashtra with support from district level committees and raise their voices against VAT. The committee will appeal to the government to scrap the tax altogether for flat buyers.
Many consumer rights activists and advocates have promised to lend a helping hand to the anti-VAT drive.