(TRC:171997) Brazen builders charge buyers 5% VAT

Brazen builders charge buyers 5% VAT
Sudhir Suryavanshi / DNAOctober
Mumbai: Flat buyers are being charged a 5% VAT by developers even though the committee set up to work out a formula to calculate the amount is yet to decide anything.

In fact, some developers have been threatening to cancel agreements or refuse possession if the VAT amount is not paid, while others are freely encashing the bank guarantees provided by buyers.

"Buyers are in a difficult situation, with neither the government nor the law able to protect us," said a flat buyer, who has been struggling to understand the calculations.

Avdhoot Chitale, secretary of Arihant Aradhana Housing Society in Navi Mumbai's Kharghar area, said the developer (Arihant Group) had taken bank guarantees for the 5% VAT amount from buyers.

"We asked the developer how he came to the 5% calculation. But he has not responded. He is also encashing our bank guarantees arbitrarily. It is surprising that the developer will not pick up one of the three formulasoffered by the government that are favourable to buyers," Chitale said.

Premanshu Chatterjee, the treasurer of the society, said, "Why is Arihant charging an extra amount for this alreadyexpensive living facility? We are confused on how to resolve the issue."

Ashok Chhajad, managing director of Arihant Group, was not available for the comment.

Arihant Aradhana is not an isolated case. Other developers too have been arbitrarily charging the 5% VAT amount through bank guarantees.

One prominent developer, however, admitted that this was a wrong practise.

"It is wrong to charge 5% VAT from buyers. They should wait for our committee report, but if they want to charge, they could take between 0.5 and 3%. Such practises sully the image of developers," he said.

Arvind Goel, president, Maharashtra Chamber of Housing Industry, said the government was equally responsible. "Till the final verdict, we all will unnecessarily suffer," Goel said.

Sent from my BlackBerry® Smartphone on Loop Mobile.

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