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Friday, 5 June 2015

FLAT BUYER’S FORUM SEEKS VAT REFUND


Even as the Sales Tax Department is computing the Value Added Tax (VAT) paid by 10,600 odd Registered Dealers or Developers, a group of Chartered Accountants, who have set up a Forum of aggrieved Flat Buyers, is now asking them to demand VAT refund from Developers.

The Forum, which operates through a website, have asked all the 450 Buyers, who have registered at the website to ask for a debit note or a tax invoice and receipt confirms that the Developer has paid tax to the Government against your flat and will further help you get the refund in the future.

The Sales Tax Department is still computing the total VAT amount-it hopes to collect more than Rs 1,000 Crore-paid by the Registered Developers. According to the Official Sources, while majority of big Developers have paid VAT, several small Developers have shown nil returns. Dealers have to file sales tax returns every three months. The Department is now in the process of verifying the reason as to why some Developers have shown nil returns.

Incidentally, even before a Buyer asks for a refund, Gundecha Builders, a suburban Developer has decided to refund the balance from the total 5% of the agreement value, they have collected from their Customers as VAT.

According to the Chairman of the Gundecha Builders, recently wrote to his 350-odd Flat Buyers asking from his Office or from the Bank for the excess VAT amount. Gundecha, which has computed VAT between 1% and 3.5% of the agreement value, will refund roughly Rs. 3 Crore to the Customers. Barring very few Buyers, who have not paid, the majority of my Customers paid the VAT amount in the form of escrow and Bank Guarantees. Now, that they have paid that VAT to the Government, they see no reason to hold on the excess money.


According to the another leading Developer, they too have plans to refund the balance amount to his Customers, who have paid in Bank Guarantees and escrow in a few days. But, they still will tell their Customers that though they are refunding the money, they will have to pay in case the Sales Tax Department comes up with an another computation and they do not want any more headaches.

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