Shock for CWG flat owners: Emaar-MGF owes government Rs.314 crore

By Gaurav Sharma, IANS,

New Delhi : Emaar-MGF Land Ltd, the real estate firm that constructed apartments at the Commonwealth Games Village (CWG) in the capital, has come under the scanner of the Delhi government for allegedly not paying Rs.314 crore as Value Added Tax (VAT).


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If the company fails to pay the amount in the stipulated one-month time, it could mean more trouble for CWG apartment owners, who are yet to get possession of their flats even 18 months after the completion of the Games.

Official sources said there was provision for attaching the property and bank account of the company if it fails to pay the amount in the stipulated time.

“The prospective action against the company may come as another blow to the flat owners as they have yet to be handed over the possession of flats,” a senior official told IANS on condition of anonymity.

The official said the assessment order was issued in the third week of February giving the company one month.

“The assessment order containing a demand of Rs.314 crore, which includes interest and penalty, has been issued to the Emaar-MGF. The company has not paid the VAT on the contract work in the Games village,” the official said.

The group, was entrusted the task of building the high-end apartments under the Public Private Partnership (PPP) model with Delhi Development Authority (DDA).

Of the total 1,168 flats, 723 are owned by DDA and the rest belong to Emaar-MGF.

The real estate developer, a joint collaboration between Dubai-based Emaar and Indian company MGF, denied that they owe any liability to the state government.

But Additional Commissioner (Special Zone) in the Trade and Taxes department K.K. Dahiya confirmed that the company owes the department Rs.314 crore.

“Yes the assessment order has been issued in this regard,” Dahiya told IANS.

When contacted, a senior Emaar-MGF official said: “We don’t have any such liability as VAT is not applicable on the sale of immovable assets. We are surprised at the demand being raised by the department.”

But another Delhi government official added: “The assessment order was passed only after hearing the party (Emmar-MGF). The party was duly heard on this matter.”

Earlier, DDA had refused to sanction completion certificate to flats built by the company claiming that they had exceeded the Floor Area Ratio (FAR) by constructing some extra flats.

Due to the dispute over this, completion certificates were not awarded to any tower.

However, following the Delhi High Court March directive the agency had to award completion certificates to the company’s 20 towers.

There are 34 towers in the village. The village was used as residential complex for the international players who had come to participate in the Oct 3-14, 2010 games.

(Gaurav Sharma can be contacted at [email protected])

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