Economy Aug 28, 2012
After the Bombay High Court dismissed the builder association's appeal against Maharashtra's government's move to levy VAT on under-construction flats bought between 20 June 2006, and 31 March 2010, the Supreme Court today extended the deadline for registration of VAT till 15 October.
The state sales tax department in a recent circular had asked builders to pay 5 percent VAT plus penalty on purchase of properties between 20 June, 2006, and 31 March, 2010, by 31 August this year. CREDAI and other bodies had moved the Bombay High Court seeking relief in the matter, but their plea was dismissed.
However, the Supreme Court today extended that deadline to 15 October and will continue hearing the matter on a later date.
The court also extended the deadline for filing returns and payment of VAT liability, without interest and penalty to the state's sales department to 31 October.
MCHI-CREDAI and CREDAI-Pune Metro had earlier moved the Supreme Court with a special leave petition but developers continue to collecting the VAT dues from their buyers. While some of the developers did take the VAT payments at the time of executing the deal and deposited the amount in an escrow account, others entered conditional agreements and are now recovering the dues.
If the Supreme Court passes a decision in favour of the developers, then the sales department will return the amount collected from the former along with the interest.
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