Builder denying possesion of flat on issue of VAT

Mahesh Gurav 1
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HI , I have purchased flat In pune in dec-2009 which is registered on 01-Jan-2010.After many promised dates(Verbally Oct-10,written in agreement-Apr11,again got letter that due to unavailibilty of sand possession is delayed tillOct-11) finaly construction is completed in 2012July.I have cleared all dues (Final Disbursement,Mainatainance+Service Tax etc.) on 2-Aug-2012,on 10-Aug-2012 news broken out about VAT of maharashtra govt. and matter is in supreme court now.Builder is now asking for VAT and denying possesion without that. 1)Can builder deny possesion on matter subject to supreme court. 2)He is asking for Blank cheque\Gurantee on stamp paper against which possesion will be given , and he will enter amount of VAT on it when court decision came,but I am against it. 3)Can I go to Consumer Court and if yes how to lodge complaint against builder and also will like to know the consequences of the same.

Hope I will receive some answer soon.Thanks for taking time to read my query.

builder-possession maharashtra-govt value-added-tax residential-flat
1 Answers

Maharashtra Govt has start charging 1% VAT on all property registrations done after 1st April 2010.

Builders would be passing this additional amount to the customers only. So in order to avoid future issues, builder may be asking for a guarantee on stamp paper. In case court rules in favor of govt and keeps VAT as it is, then builder will have to pay this amount to govt.

Builder should not deny possession because of this. Builder is playing safe by asking blank cheque or guarantee on stamp paper. Suppose he give out possession and later he is asked to pay VAT then it would be difficult for him to get this amount once flat is handed over.

You should avoid providing blank cheque, instead give a guarantee on stamp paper with all conditions of payment in it.

I don't think consumer court would help in this case as builder is not asking for extra payment but a guarantee that additional payment would be done in case its required in future.

Pankaj Batra5212
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