Builders’ plea against VAT levy rejected by Bombay HC
A bunch of petitions were dismissed by the Bombay High Court as the petitions challenged the state government’s decision to levy the builders with a 5% Value Added Tax (VAT) on buildings which were under construction from 2006 to 2010. This rule was declared a day before the tax payment deadline.
Justice Dhananjay Chandrachud and Justice Rajesh Ketka from the division bench said that there is no merit in the challenges. They also quoted that a wide degree of latitude was enjoyed by the legislature in tax matters. The builders felt that the state discriminated between the buildings built before and after 2010.
However, the state composition scheme states that developers with buildings under construction from the specified years are supposed to pay 5% VAT of the Works Contract. This includes the cost of construction and excludes the land value and the amount paid to the subcontractor, service charges and so on.
Bombay High Court, Builders, cost of construction, Dhananjay Chandrachud, Justice Rajesh Ketka, Petitions, State government, Tax payment, Under construction, value added tax (VAT)
