(TRC:168447) Maharashtra housing body to hold a meet on VAT refund.

Maharashtra housing body to hold a meet on VAT refund. Between 2006 and 2010 and had paid money (in the form of guarantees and deposits) to builders are now a confused lot over the refund mechanism.

Vilas S, an executive with a leading. corporate firm, said, "I do not know which authority to approach. I had given a bank guarantee of Rs 3.5 lakh, which is 5% of the agreement value, to my developer when I booked a flat in Vashi five years ago. After the recent fiasco, I and 14 other flat buyers from our building asked a sales tax official to explain VAT to us and we were surprised by what he told us. According to rough estimates, the VAT works out to approximately Rs 25,000. I showed this to the developer, but he is refusing to accept our calculation. He is also not willing to show us how he had arrived at the figure of Rs 3.5 lakh," Vilas said.

Borivli resident Rajat Purohit, who paid Rs 1.5 lakh as VAT, echoed similar views. "I do not understand why there is no clarity on the amount payable as VAT. I purchased this flat from my hard-earned savings. Which consumer has the time and the energy to fight a legal battle to verify whether or not the developer has taken the correct amount from him," he asked.

The Maharashtra Chamber of Housing Industry (MCHI) will meet on 4th August and is likely to discuss the refund issue.

Pujit Aggarwal, managing director of Orbit Corporation and MCHI member, said buyers need not worry. "The balance VAT amount will definitely be refunded to the buyers. VAT is paid against each flat agreement and not as a lump sum. A receipt is made with details of the transaction. No developer will keep the amount with himself," said Aggarwal. "The sales tax department may interpret the VAT payable as 5%. Had we refunded the amount to buyers earlier, it would have been difficult for us to search for the buyer. So the refund, if any, will take time as the sales tax department is yet to clarify to developers the exact amount payable as VAT," Aggarwal added.

Source: The Times of India, Mumbai
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