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.