We had bought an apartment from the builder Mahaavir Enterprises (c/o Mahaavir Universal Homes), Navi Mumbai. The apartment is in Mahaavir Heritage, Kharghar. Due to levy of VAT on property sale, the builder demanded VAT from us. There is no reason that the VAT should have been collected from buyers, since this was a VAT on the builder. However, we were promised by the builder that the VAT levy would be fairly settled once the government order (which was being challenged by builder lobby). On this basis, we had no option but to temporarily acceded to the demand of the builder. The builder charged us and made us pay an amount of INR 1,75,000 (Rupees One Lakh Seventy Five Thousand Only) vide cheque no. 032691 drawn on ICICI Bank. We noted that the amount charged to us is an exact 5% of the total purchase value of our apartment – i.e. INR 35,00,000 (Rupees Thirty Five Lakhs only). the builder promised that they will provided details of the VAT rate chargeable to us. We have made multiple follow-ups with builder on the nature of this charge, the calculations and a refund. This is a a wrongful charge considering that as per the current government taxation norms, MVAT is payable only on the “value-added” by the developer and NOT on the total sale value of the apartment (Reference Rules 58 or Section 42 (3) of Maharashtra Value Added Tax Act). Given this, it is obvious that Mahaavir Enterprises has wrongly overcharged us by a significant amount under the disguise of MVAT norms. In reality, the effective MVAT levy should be no more than 2% of the apartment value. Accordingly, the builder owes a refund to the extent of say 3% – i.e. INR 1,05,000 (INR One Lakh Five Thousand only). Considering this, we demanded the following actions from the builder for over 2 years – through various notices, letters, emails and phone calls. 1. Receipt of the payment made by us to the builder in response to their (unfair) demand of INR 1,75,000 in lieu of MVAT 2. MVAT registration certificate obtained by Mahaavir Enterprises for payment of MVAT for the Mahaavir Heritage project. 3. Detailed government authorised calculations that demonstrate the true and fair MVAT amount rightfully attributable to us in respect of our apartment. 4. Immediate Refund to us of the difference in value of amount between point 3 and point 1, which has been wrongly demanded, charged and received by the builder from us. We have made multiple representations but the builder has NOT RESPONDED even once to us. We hence now demand a full refund of INR 1,75,000 with penal interest accumulated over the years. We now look the honourable Consumer Cell and associated courts to help grant us justice.

As explained the MVAT wrongly charged to us is to the tune of INR 1,75,000/- (@5% of apartment value) As per fair calculations, we believe the effective MVAT rate on apartment value should be no more than 2%. Hence, on that ground alone, the refund due is INR 1,05,000/- However, we feel that it is likely that builder has not paid any MVAT whatsoever, and his contention that MVAT is due to be collected from buyers is not established in law. Hence, the entire amount INR 1,75,000 is refundable to us in full. We also believe that penal interest of 12% per annum should be levied on the amount (INR 1,75,000) in a fair settlement.

Email Id: pawanbindal77@yahoo.com