Developers don’t have the money to pay VAT

Saturday, 3 November 2012 - 8:00am IST | Place: Mumbai | Agency: DNA
Developers did follow the October 31 deadline but to an extent. While hundreds registered themselves with the sales tax department, not many paid VAT in full.

Developers did follow the October 31 deadline but to an extent.  While hundreds registered themselves with the sales tax department, not many paid VAT in full.

The reason: they do not have enough money to pay tax.

“We worked late into the night on October 31. It was the last day and applications of builders kept pouring in,” an official said. “Our website was jammed and plenty of developers visited our office till late in the night to submit their applications.”

According to official records, 10,700 builders have registered. “But we are not sure if we can reach our estimated target revenue of Rs2,000 crore. Those who are still to pay will have to pay interest as well as fine,” the official said.

Arvind Goel, president of the Maharashtra Chamber of Housing Industry, Navi Mumbai, said builders and buyers are going through a difficult time.

“Many buyers did not pay VAT despite developers repeatedly urging them to do so,” he said. “So, we had no money to pay VAT. Most of us followed the deadline and registered... But some decided to pay VAT later.”

Another developer said the government should have extended the deadline for paying VAT.

A prominent developer who has projects ongoing in the central and western suburbs said, “The government cannot recover the money at gunpoint. We aren’t making profit always. Our debts are mounting. And buyers who have got possession of flats are reluctant to pay VAT.”


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