5% vat on flat

Meghna Kumra (Querist) 20 August 2012 This query is : Resolved
Dear sir,
We have purchased a flat in March 2009 in Pune.
We have got the possession in August 2009.

Now we have received a notice to pay 5% VAT. This VAT demand letter also has a component of 15% pa interest payable too.

We need to understand the law towards the VAT. As per our knowledge it should be 1%.

We have already paid the stamp duty and service tax. Do we really need to pay 5% VAT now?

Please help us.

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Raj Kumar Makkad (Expert) 20 August 2012
Enforcement of law is automatic and there is no need to specifically send you prior notice to make the payment of VAT. Since the financial year 2008-09, VAT is must to be levied on all sale and purchase of flats hence the rate imposed is also correct with demanded interest.

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