SC ruling on VAT will impact consumers: say developers

SC ruling on VAT will impact consumers: say developers

Following Supreme Court’s recent ruling value-added-tax (VAT) on construction projects in Maharashtra, developers said the additional burden would eventually have to be borne by buyers/consumers.

The apex court on Friday upheld a Bombay High Court ruling directing builders to pay government a levy of 5 per cent VAT on sale of houses constructed between 2006 and 2010 in the state.

Sunil Mantri, vice president of National Real Estate Developers Council, said, that the ruling would impact consumers because most of the houses constructed during the concerned period had already been delivered.

Reacting top the apex court’s ruling, Mantri said, “Imposing 5 per cent VAT on the flats constructed during June 2006-March 2010 would impact consumers as most of the apartments under construction during that period were already delivered.”

The levy was announced by the Maharashtra government in the year of 2006, but Credai (Confederation of Real Estate Developers Associations of India) challenged the imposition of the levy in the Bombay High Court, which upheld the government’s decision. The developer’s association then challenged the decision in the apex court, which also upheld the government’s view.

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