legal procedures/advice on tax @ 5% on flats-pune

Dear Forum members/ Experts,

I had bought a flat in pune in May 2009. It has been almost 3 years now, when this 'VAT' thing has suddenly cropped up out of the blue.
 The builder has issued letters to all the flat owners stating that :
 a) VAT has to be payed which is calculated by composition method (5% of the agreement value) , and a lumpsum amount is mentioned in each letter as per 5% of the agreement value
 b) VAT has to be payed immediately.

 Now, in view of the Hon'able Supreme courts decision and some self study (FAQ's of the VAT from the MAHAVAT website), it seems that:
 a) There are three methods for calculation of VAT, out of which the composition method is widely accepted by the builders in pune because it states that 5% of the agreement value shall be the tax charged from the customers.
 b) The 'composition method' thus mentioned shall be elgible for a deduction upto 4% for the input tax credit ( VAT already paid by the builder for building materials etc.) 

Now my query is as follows:
a) Can we, the flat owners, ask the builder for the input tax credit deductions, if so, how can we legally enforce that on him. Because it is for sure that if we pay 5% of the agreement value as tax, it would be the sole discretion of the builder to pay the VAT chargeable and if he is eligible for any deductions, it would never be disclosed to the poor customers (who are really helpless creatures!!) and it would be happily pocketed by him.
 b)Can we challenge / file a writ petition to the state government challenging the 5% tax value against 1% which is chargeable on the flat owners who got their flats after 2010, on grounds of discrimination.
 c) Can we refuse the builder to pay the VAT amount, on grounds that it is his responsibility to pay the VAT amount because it is the builder who is liable for this.

I am sure that a lot of people would have similar queries. If you, the experts would dedicate some time in answering the above queries, it would help a lot of customers in pune.


Subhankar Nag / Pune




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