Lodha demanding MVAT from Customers
This query is : Resolved
21 December 2010
I Book a flat in casabella from Lodha. I did my sales agreement on 23 march 2010. Now Lodha is demanding MVAT from us.
Registration before 01-04-2010 should pay 5% of the sale agreement, after that need to pay 1% of the sale agreement.
anybody please tell me, really do I need to pay or not.
Time of buying the flat they didnt even told me about this MVAT.
What is the meaning of MVAT.
Registration before 01-04-2010 should pay 5% of the sale agreement, after that need to pay 1% of the sale agreement.
anybody please tell me, really do I need to pay or not.
Time of buying the flat they didnt even told me about this MVAT.
What is the meaning of MVAT.
21 December 2010
Thats called WCT (Work Contract Tax).
You have to pay that tax.
You have to pay that tax.
21 December 2010
yes you have to bear that though they should have told you about this on your request..
21 December 2010
Thank you very much. But they did not inform me before. what to do now. If it is 5% I need to pay around 96,000 which is almost equal to my sale agreement and registration.
03 August 2024
**Maharashtra Value Added Tax (MVAT) on Real Estate Transactions**
### Understanding MVAT
- **MVAT**: Maharashtra Value Added Tax is a state tax levied on the sale of goods and services within Maharashtra. For real estate transactions, MVAT applies to the sale of properties and is typically levied on the sale of goods involved in the construction process.
### MVAT Applicability to Real Estate Transactions
- **Pre-April 1, 2010**: Before April 1, 2010, the MVAT rate applicable on real estate transactions (for the sale of under-construction properties) was 5%. This rate applied to agreements executed before the cut-off date of April 1, 2010.
- **Post-April 1, 2010**: After April 1, 2010, the rate of MVAT was reduced to 1% on the sale of under-construction properties.
### Your Situation
- **Agreement Date**: Your sales agreement was executed on March 23, 2010. This means your transaction falls before the April 1, 2010 cut-off.
- **MVAT Demand**: Lodha is demanding MVAT from you based on the applicable rate at the time of the agreement. According to the law, since your agreement was made before April 1, 2010, you should be liable to pay the MVAT at 5%, not the reduced 1% rate.
### Key Points to Consider
1. **Disclosure of MVAT**:
- It is standard practice for developers to inform buyers about applicable taxes and additional charges. If Lodha did not inform you about the MVAT at the time of booking, you may have grounds to argue that you should have been made aware of it in advance.
2. **Legal Obligation**:
- If the MVAT is applicable as per the date of your agreement (March 23, 2010), then it is legally correct for Lodha to demand the 5% MVAT.
3. **Amount and Calculation**:
- The 5% MVAT on the sale agreement amount will be calculated as per the value mentioned in your agreement. If the MVAT amount is significant, it would indeed be substantial, but it is aligned with the legal provisions for the date of the agreement.
4. **Action Steps**:
- **Verify the Tax Demand**: Confirm the calculation and applicability of MVAT with a tax advisor or legal expert.
- **Documentation**: Check any written communication or agreement clauses that might indicate tax liabilities.
- **Negotiate or Seek Clarification**: Contact Lodha for detailed clarification and negotiate if necessary. If you believe that there was a lapse in communication, address this with them formally.
### Summary
- **Yes**, you are required to pay the MVAT at 5% based on the date of your agreement (March 23, 2010).
- **MVAT** is a state tax on the sale of goods and services. For real estate, this applies to the sale of under-construction properties.
- **Action**: Seek advice from a tax professional to ensure that the demand is accurate and consider negotiating with Lodha if there were lapses in communication.
**Consult a tax advisor or legal expert** for precise guidance tailored to your situation, especially to handle any discrepancies or issues with the demand.
### Understanding MVAT
- **MVAT**: Maharashtra Value Added Tax is a state tax levied on the sale of goods and services within Maharashtra. For real estate transactions, MVAT applies to the sale of properties and is typically levied on the sale of goods involved in the construction process.
### MVAT Applicability to Real Estate Transactions
- **Pre-April 1, 2010**: Before April 1, 2010, the MVAT rate applicable on real estate transactions (for the sale of under-construction properties) was 5%. This rate applied to agreements executed before the cut-off date of April 1, 2010.
- **Post-April 1, 2010**: After April 1, 2010, the rate of MVAT was reduced to 1% on the sale of under-construction properties.
### Your Situation
- **Agreement Date**: Your sales agreement was executed on March 23, 2010. This means your transaction falls before the April 1, 2010 cut-off.
- **MVAT Demand**: Lodha is demanding MVAT from you based on the applicable rate at the time of the agreement. According to the law, since your agreement was made before April 1, 2010, you should be liable to pay the MVAT at 5%, not the reduced 1% rate.
### Key Points to Consider
1. **Disclosure of MVAT**:
- It is standard practice for developers to inform buyers about applicable taxes and additional charges. If Lodha did not inform you about the MVAT at the time of booking, you may have grounds to argue that you should have been made aware of it in advance.
2. **Legal Obligation**:
- If the MVAT is applicable as per the date of your agreement (March 23, 2010), then it is legally correct for Lodha to demand the 5% MVAT.
3. **Amount and Calculation**:
- The 5% MVAT on the sale agreement amount will be calculated as per the value mentioned in your agreement. If the MVAT amount is significant, it would indeed be substantial, but it is aligned with the legal provisions for the date of the agreement.
4. **Action Steps**:
- **Verify the Tax Demand**: Confirm the calculation and applicability of MVAT with a tax advisor or legal expert.
- **Documentation**: Check any written communication or agreement clauses that might indicate tax liabilities.
- **Negotiate or Seek Clarification**: Contact Lodha for detailed clarification and negotiate if necessary. If you believe that there was a lapse in communication, address this with them formally.
### Summary
- **Yes**, you are required to pay the MVAT at 5% based on the date of your agreement (March 23, 2010).
- **MVAT** is a state tax on the sale of goods and services. For real estate, this applies to the sale of under-construction properties.
- **Action**: Seek advice from a tax professional to ensure that the demand is accurate and consider negotiating with Lodha if there were lapses in communication.
**Consult a tax advisor or legal expert** for precise guidance tailored to your situation, especially to handle any discrepancies or issues with the demand.
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