Panel formed to protest VAT in Maharashtra


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.


I want to join FORAM - flat owners' rights protection action com

I want to join FORAM - flat owners' rights protection action committee, can some body please give the contact details - Pravin Suvarna Mobile : 9323396367

Its an indeed double

Its an indeed double taxation, steel, cement are already under VAT, so builders might have paid VAT already while purchasing material. Then why we again need to pay VAT on already taxed material? Builders are collecting VAT with 5% of agreement value, where as rule/law says that it should be on material used and not on agreement value. Builders haven't kept any proper book keeping for the same and hence they are demanding 5% VAT (composition scheme) even though there are 2 other methods (actual deduction & standard deduction) to levy tax which can be very very lesser than 5%, as it involves deduction of land cost, labour, other services (architect fees, engineering services, electric wiring, legal fees etc). While Mr.Ajit Pawar states that this tax to be paid by builders, but didn't state anything about "not to recover this from buyers" which puts buyer in confusion and insecurity. Provided lesser cost of construction material from 2006 to 2010, buyers must be liable to pay very less taxes. Agreement clause is very unclear as its standard clause which states that all taxes needs to be paid by buyers. With this definition even a toilet can become taxable. If this case was pending since 2006 then agreement shall mention it clearly with probable amount to be paid upfront, but this is not the case. While builders are still free to enjoy their profits as they are likely to recover their paid VAT from buyers and buyers will be left in pieces due to this excessive tax burden, which came crashing down from no where. As I am sure very few buyers were knew about this case, while others were kept in total dark by builders and developers. So govt. of Maharashatra is actually asking people to pay taxes defaulted by builders which is not at all fair.

Very well said.....In most of

Very well said.....In most of the cases (including mine) developers have kept us in dark about the VAT liability. They were aware of the VAT calculation rules and should have included the amount in agreement as future liability (in an event of court ruling going in favour of tax dept). This would have helped us make an informed decision on our finanicial liabilites and we would have planned accordingly. Just putting a blanket clause stating all future liabilities will be borne by buyer does not absolve the developers

How to join FORAM

I want to join FORAM - flat owners' rights protection action committee, can somebody please give the detail of foram.
M Singh


We will like to join FORAM at the earliest. contact details 9867326513

It is really double

It is really double taxation,I want to join FORAM. Also if we are buying an under construction propertly which will be avialable in atleast 2-3 yrs of time but we have to register our property before possession but if we look other state it is not necessary to do the registration before possession and you can apply for Home Loan with out registration. but in Maharastra you have to go for registrationthen only you can apply for Home Loan , so government enjoy interest on Registration feed for 2-3 yrs

vat protest

VAT on flat is reduculous bcause materials used for flat have alrdy taxed. To pay/recovering tax is foolishness and cheating to public

Grieved & confused flat buyer seeking correct guidance!!!

I want to join FORAM - flat owners' rights protection action committee, can some body please give the contact details - Abhijit K. Mobile : 9422013173