Help! VAT should we do, ask clueless buyers

The phone hasn’t stopped ringing at the state sales tax department office since DNA on September 3 published numbers where readers could clear their doubts about value added tax (VAT). There are several queries via e-mail too.

“We receive 100-150 phone calls and 150-180 e-mails every day on VAT queries and doubts,” said Swati Kale, deputy commissioner of sale tax, publicity. She said they got almost 2,000 calls and 1,800 e-mails in the past 10 days.

Such is the frequency of the calls that employees have to stay on office till late at night to answer the calls and send replies to emails, Kale said. “Not a single query goes unanswered,’ she told DNA.

Most of the calls are from Mumbai and Pune. Residents of Solapur and Kolhapur who have bought flats also seek details about VAT. “Almost 80% calls are from buyers and chartered accountants. Developers call as well, but the figure is minimal. We are happy to bring clarity on VAT and help people so that no one manipulates them,” said a sales tax officer.

Frequently asked questions on the dedicated helpline include who has to pay VAT — developer or buyer?  The amount of VAT a buyer has to pay and the formula to calculate it.

“People even ask why has the government introduced VAT. They want to know if the sales tax department will protect them if the developer demands VAT on a ready flat. We are happy to clear their doubts,” said  Sanjay Nikam, deputy commissioner of sales tax department. He said the VAT percentage should either be 5% of 0.5%-2%.

Pune resident Anand Chaudhuri, who dialled the helpline after reading DNA, found it very helpful. “The sales tax department’s helpline desk is very proactive and helpful. I must thank them.

They gave me their website link as well as their personal numbers to clear any additional doubts. They also gave me the number of an officer in Pune,” he said.

Chaudhuri is overwhelmed with the response he got. “I am very happy. The staff told me that they were government servants and that it was their job to help people. It has changed my attitude towards government employees and departments,” he said.
In our front-page report published on September 3, we said the VAT amount is calculated either on the total cost of the construction material or the agreement value of the flat, whichever is lowest. This means contrary to belief, the VAT amount will not run into lakhs.