Gurugram: The decision will not only make life easier for buyers
but will also prompt developers to deposit VAT as a large number of them have
challenged the Haryana excise and taxation department after notices were issued
to them for payment.
Spelling relief for apartment buyers in the state, the Haryana
government has notified the value added tax (VAT) at the rate of 1% for real
estate projects built till March 31, 2014.
The decision will not only make life easier for buyers but will
also prompt developers to deposit VAT as a large number of them have challenged
the Haryana excise and taxation department after notices were issued to them
for payment.
A notification issued by Haryana government on September 12 states
that the Haryana Alternative Tax Compliance Scheme for Contractors, 2016, is an
amnesty scheme for the recovery of tax, interest, penalty or other dues payable
under the Value Added Act, 2003, for the period up to March 31, 2014, and
earlier. This means that the retrospective rate of payment of tax would be 1%
and not the 4% or 5% as demanded by developers.
Haryana finance minister Capt. Abhimanyu during the National
National Real Estate Development Council (NAREDCO) Convention held in New Delhi
on August 19 had assured developers to decide the VAT and fix the rate at 1%,
said Parveen Jain, president, NAREDCO.
As per the scheme, the contractor or developer shall calculate and
declare his year-wise liability under this scheme and shall pay 25% of the
total amount due with the application. The balance 75% is to be paid in three
quarterly instalments, each payable within 15 days of the end of the next
quarter without interest.
A committee comprising two senior most excise and taxation
officers and the assessing authority shall examine the application.
Samir Yadav, deputy excise and taxation commissioner, Gurgaon,
said a contractor opting for this scheme shall apply online within 90 days from
the date of notification. “This scheme will reduce litigation to a large extent
and will also bring clarity about the payment of value added tax by
developers,” Yadav said.
For consumers, the amnesty scheme means that they cannot be forced
to pay 4 to 5% VAT, and in some cases even more.
In case, the buyers have paid VAT higher than 1%, then they will
either be refunded or the amount will be adjusted towards purchase of property,
said Jain.
“This decision has put to rest speculation and uncertainty. It
will ensure an end to pending litigations... this decision shall generate more
revenue for the government,” Jain said.
