Vat demanded by builder


I have taken a flat in July 2009 which was a newly contructed ready to occupy flat. I paid the basic price and registration/stamp duty price, of the flat and moved in. But recently in Nov 2013 i got a letter from the builder asking me to pay around 58000rs as VAT. I need to know what it is for ? The occupancy certificate of the building is still not provided by the Muncipal authority.
Thanks in advance

 
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Sep 27 '2013 SC verdit on VAT

Apex court verdict upholding Bombay high court ruling is a jolt to developers in the state.

This is good news for those who have bought property between June 2006 and March 2010. The Supreme Court on Thursday said Value Added Tax (VAT) cannot be imposed on buyers.
This has come as a jolt to builders in the state who wanted 1% tax instead of 5% imposed by the state government in 2006. They were recovering the VAT amount from buyers.
 

 

Following Supreme Court upholding the Bombay High Court verdict directing builders to pay five per cent value-added-tax (VAT) on properties sold ahead of completion, developers will now have to remit the tax.

The judgement applies to all under-construction properties transacted for sale between 2006 and 2010.

The apex court also stated that VAT is not payable if a fully constructed flat is sold to buyer as it would not amount to a ‘works contract, he said.
 

 
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