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, seputy 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.