CAs urge to levy 1% VAT in Maharashtra
The Bombay Chartered Accountants Society (BCAS) has urged the state government to levy a uniform one per cent tax on buyers who purchased flats between 2006 and 2010, and those after 2010.
The sales tax department and developers are yet to arrive at a mutual agreement over the quantum of Value-Added Tax (VAT) leviable, the CAs have come up with a solution. They have given argument that it is almost impossible to calculate VAT accurately for under-construction properties as there is no single way to calculate the liability.
According to rules in Maharashtra, tax is payable by a dealer on the sale price of goods, at such a rate of tax. The liability tax payment comes up on a periodic basis – monthly, quarterly or six monthly.
The BCAS states that difficulty arises as building construction does not complete for years. Developers usually then collect the sale price in installments.
Developers pointed out that although it is possible to work out the amount of tax payable on the entire project spreading up to five years, difficulty arises as the sales tax department would ask for payment of tax as per the periodicity starting from the date of the beginning of the project.
To read more real estate news:
Thane Municipal Corporation’s property tax proposal criticised by political parties
Bombay Chartered Accountants Society (BCAS), Maharashtra, Realty developers, sale price of goods, sales tax department, state government of Maharashtra, value added tax (VAT)
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