Monday, 16 June 2008
You have to pay VAT on residential properties in Mumbai
You walk down any street in Mumbai city; you are likely to see the construction of some kind. Many of the old building have been razed for redevelopment and you can see the Mumbai sky line changing every day. There are too many constructions everywhere and the prices of these new flats that are being constructed are ridiculous. Citizens already put off by the senseless prices of residential properties have now a new head ache.. They have to deal with - Value Added Tax (VAT) that is amounting to 5 per cent, (this was introduced in 2006 but has been made applicable from this year).
Last week, the sales tax (ST) department issued circular asking personnel to keep track of projects begun after the proposal was moved.
Builders are opposing the VAT, not out of concern for flat buyers but fearing a decrease in sales due to the increase in the cost of the flat.
In layman's terms, it means a new flat must be treated as a manufactured product, like a car or a TV set.
However, if you bought a flat after 2006 and do not remember paying VAT, it was because it was applicable only on under-construction projects and those which had been booked but for which occupation certificate had not been issued.
Builders who have not yet charged VAT from flat-buyers have included a clause in the sale deed that if the government insists on VAT, then the customer has to pay from his pocket.
So read the fine print before buying a property in the city of Mumbai.
Source: Mumbai Mirror
The name "Bombay" was derived from 'Bom Bahia' (The Good Bay),
.... a name given by Portuguese sailor Francis Almeida, in 1508 ....“Bounce back Mumbai” .....as it is called by the locals, it is a city that has been through a lot in the recent past – floods, bomb blasts, riots – and come out stronger each time.
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