VAT demand from RPS Infrastructure in relation to work contract

[hitesh2687]

This is what I got in reply from RPS.

Dear Sir,

This is with reference to e-mail dated 24/12/2015.

As regard demand of Rs. 144974/-, towards VAT demand (@ 3.25% on total valuable consideration of Rs. 4460749/-) by competent authorities.

After the directions of the Hon’ble High Court of Punjab & Haryana, Chandigarh, the department of Excise and Taxation, Govt. of Haryana has issued rules to frame the procedure for VAT assessment. Under the new rules they have conducted assessment and raised the demand of VAT.

As regard notification referred by you in your e-mail, it discuss about deduction of components like labour, services and land only from total valuable consideration to determine tax liability and authorities have considered full/partial deduction for the said components while calculating tax demand (VAT). As per nature of items used in building construction, the rates of VAT charged is up to 13.25% on different items/ components.

After allowing certain deductions, the demand raised by VAT authorities works out @ 3.25% on total sale value consideration against the applicable rates upto 13.25% on different items consumed in construction. Therefore the demand in respect of your unit has been raised accordingly @ 3.25% only on the gross value of unit i.e. Rs. 4460749/-.

If you wish to verify the assessment order and demand raised by authorities, the same are available at our office and may be verified by any of allottee during office hours.

As per agreed terms any charges, levies, taxes etc. levied by govt. authorities are payable immediately on demand by unit holder. We once again request you to arrange for clearance of VAT demand at the earliest.

We welcome any of further clarification, if any, in respect of levy of VAT and it would be our earnest endeavor to take up the matter with the department to have possible relaxation/ rebate (if any) for the benefit of all our esteemed allottees.

Should you require any further details, you may contact our office during Monday till Friday as per your convenience. You may contact us telephonically at 011-40543200.

Thanks,

[deven1101]

Present residents of RPS Savana has jointly demanded from RPS below-
1. Either take 1% VAT as per composite scheme circular of Sept 2015 by Govt Of Haryana
2. Or recalculate VAT unitwise under various heads as per offer of possesion demand excluding allowed dedications and applicable rates as per July 2015 circular .
3. Not to invoke BG before satisfactory calculations.
4. Charge only amounts paid yearwise as per assessment , exclude payments before April 2010.

Residents representatives will again formally meet RPS Management over this weekend.

[amit.nagpal]

For the residents, who are yet to take possession of the units (In recently finished towers B5-B9), what can be the action plan since they have linked the final hand over of the unit with VAT demand in the final demand letter.

I had booked the flat in resale in Dec 14 so how the calculations work??

[deven1101]

VAT either has to be challenged or to be paid
Can be challenged on below grounds
1. Builder should register himself under composite scheme and pay 1% composite VAT to Govt, he can not charge from buyers under this.
2. Builder buyer agreement to be challenged and court/CCI rejects clause that says all Govt taxes to be paid by borrower .
3. To challenge that VAT is builder liability and must not be passed on to consumer.

How many would like to challange?

Regards,
Devendra

[hitesh2687]

I am in. For my guidance what is procedure and any estimate of litigation cost.

[anuj]

@deven1101: Count me in too and please share the next course of action. If we have to knock the doors of law we should do that ASAP.

[deven1101]

There is some action for VAT by many residents, those who want to join may send their details to rps-savana-residents-nominated-body@googlegroups.com

Regards,
Devendra

[anuj]

Sent the email to the distro you requested. Please add me to this group.
Also help me understand, what as a single unit we all are doing against the below.

1) RPS not ready to pay the penalty for delayed possession
2) Enhanced EDC collected but not paid. Also, it is on stay by court.

[sameer23]

Hi

I received the VAT letter today asking for 1.05% VAT for payments until 2014. What is the situation now, can anyone please advise if it to be paid or not...
Thanks

[anuj]

VAT (Item m mentioned in Offer of possession): Sameer, take a note that this law (VAT on property) has come into picture in 2010 which falls after the promised date of apartment possession i.e. 2009 (36 months from date of execution of buyer’s agreement). Considering this, it should have been adjusted in the offer of possession as the delay has happened from RPS and Customers should not be held responsible for RPS failure. Most of the people including me have already filed the case against RPS to take off VAT and this will be considered as illegal demand considering the fact that RPS failed to give possession in 2009. I will suggest you to take a call on this but ideally you should not pay this as delayed in possession is not your fault and thus the laws which have come into picture after that, customer should not be help responsible.