T L Jain, Apartment Resident, Mumbai
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VAT and Service Tax demand from Builder
Q: Shocked to receive a demand of Rs.5 Lakhs (Approx) towards VAT and Service Tax. This includes interest of Rs.1.5 Lakhs (Approx) for delayed payment of VAT. Questions; 1) How the builders have calculated the demand of VAT & Service Tax? 2) Have the Input Credits available to the builder for the materials bought by them with VAT and used in the construction of the building been set off against the demand of VAT? 3) Delay in giving the possession of the flats by the builder should not penalize the owners on account of interest and penalties? 4) Delay in giving the possession of the flats by the builders is already causing lot of interest burden on the owners who have taken the loans. Builders should be responsible for compensation of the interest loss and consequential losses arising out of delayed possession. -- T. L. Jain, Flat No.1403, "B" Wing.

Latest Answer: Further, we all should also understand the following ;- 1) VAT is builder's liability and there are legal positions suggesting that it is not chargeable by them. 2) Matter is still undecided and liability is yet not conclusive. 3) This is on account payment till fully assessed and therefore the share should be equal as Builder is responsible as primary assesee. 4) Builder can pass on the conclusive tax or levy but not on account payment. 5) Builder is yet to give full working . They cannot provide till it is assessed in toto. ( Till His Return is accepted ) 6) We have no proof that it is paid by builder. 7)Our undertaking is with them we cannot pay full till it is discharged.

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