'VAT on flats won't be rolled back' There will be no rollback of value-added tax (VAT) on the flats sold between June 2006 and March 2010 and buyers will have to bear the burnt for the rest of the state, reiterates Maharashtra finance minister Ajit Pawar in an exclusive interview

'VAT on flats won't be rolled back'

There will be no rollback of value-added tax (VAT) on the flats sold between June 2006 and March 2010 and buyers will have to bear the burnt for the rest of the state, reiterates Maharashtra finance minister Ajit Pawar in an exclusive interview

There has been hue and cry among the flat buyers because they have to shell out a huge amount towards the 5% VAT levied by the state government? The issue is six years old. The buyers have voluntarily signed the agreement with builders. Now, it would be wrong to say they have been caught unawares about the tax levied. People should understand that there would be no rollback on the VAT levied on the flats. Ever since I have taken over the reins of the finance department, no decision has been reverted by any of our departments. But the builders have always been high-handed with the consumers. Now, too, they are making the consumers pay the VAT levied… But it is very difficult to give second thought to the decision. We cannot run a government without levying taxes. And, the pinch is to those pockets who can afford to pay. After all, the government also has to spend a huge amount on the drought across the state, pay the hiked salaries after implementation of the Sixth Pay Commission and rising revenue expenditure. If the consumers are thinking that they alone are facing the burden, it's because of their ignorance. The bill was passed with due discussion six years ago. I am sure many of the buyers were well aware about the Act. After all, we expect builders to pay the tax. But you have been discussing the issue with the builders' association? Secondly, why is the gap of the rate between today’s VAT and the one levied earlier? Yes, we have discussed the issue with the builders' organisations on several occasions. They demanded to reduce the tax and extend the deadline. We thought the issue could be sorted out amicably, but the builders defied us and moved court. Now, we are bound to follow the Supreme Court order. For the difference between the rate of VAT, the builders are to be blamed. They have kept the issue hanging for the last six years. But the general sentiment is that the government is least bothered about the public. The consumers are helpless due to the scarcity of the housing stock… It is not true that there is demand-supply gap in the real estate sector. Investors have blocked the stock and are manipulating the market. There is a need to strictly implement the law that implies the builders to avail the small-sized houses. Builders cannot hold consumers to ransom. What is the revenue projected from the VAT on the flats? It is very difficult to quote a figure until the actual implementation. It may range from Rs1,000 crore to Rs2,500 crore.