The sales tax (VAT) dept of Maharashtra has conducted raids on top builders in the past 2 days and found tax evasion to the tune of 20 crores so far. The builders are supposed to collect this sales tax (VAT) from the flat purchasers and deposit it with the govt. The current rate of VAT is 1% on under-construction properties. Ideally, the flat purchaser should take a receipt from the builder for this. The receipt should have a VAT registration number. This is vital to assure that the buyer will not be left defrauded.
In this case it was seen that the builders collected this 1% from the purchasers ,but didn’t issue any receipt and kept the amount collected from the buyers.20 crores was recovered from the builders which included noted names such as Marathon, Ajmera, Keystone, Bhoomi realty, Naman and Acme, according to some reports.
Flat purchasers should insist on this receipt with the sales tax number. Without it, you can say goodbye to your money.
- Maharashtra state to fine builders 31 crores for cheating Mhada. (navimumbairealestate.org)
- Value Added Taxes Around the World (turbotax.intuit.com)