• Who pays additional taxes and cess - buyer or builder

i have book a fat in Rajnager Extention in Jan 2012. my building is ready for posession now but the builderr is asking for some additional charges like VAT security, labour cess, and metro Cess. the total is coming out to be a good 44000/-  
these charges were not mentioned in our agreement at the time of booking.
 but our agreement says that any govt. taxes or cess now or in future is to be beared by the buyer.

my question is if the taxes are applicable to us or can we pressurise the builder to waive it.

please guide 
V . Sharama
Asked 3 years ago in Property Law from Ghaziabad, Uttar Pradesh
1)in order to protect builder   interest generally there is a clause in agreement that labour cess and other charges will be paid by buyer . 

2) you can  pressurise builder to waive these taxes but it is doubtful that builder would agree to do so
Ajay Sethi
Advocate, Mumbai
44207 Answers
2562 Consultations

5.0 on 5.0


1) One needs to carefully go through the entire clauses in the Agreement that insulates the builder against the charges being levied. The commonplace practice is that there will be.

2) If the agreement says that  any govt. taxes or cess now or in future is to be borne by the builder then he needs to pay it and insist that he does so.

3) You can certainly  build pressure on the builder and see if that works or arrive at an agreeable settlement.

4) If he is not being helpful and compromising go ahead and make the payment now and once the registration was done and you got possession approach the consumer forum and seek refund and compensation from the builder.
S J Mathew
Advocate, Mumbai
2229 Answers
110 Consultations

5.0 on 5.0

1. It depends on what has been mentioned in the agreement you have entered into with the builder,

2. If it is mentioned that you shall have to pay all the taxes and levies imposed by the Govt then the builder can ask you for making the said payment,

3. However, if any such local Act, Rule etc. specifically mentions that the said tax/levy shall have to be paid by the builder, then he can not pass on his responsibility on the buyers,

4. In such case, I will suggest you to pay the exces amount charged/claimed under protest and then file a consumer complaint xcase claiming back the amount with interest,damage and cost,

5. Such consumer case should be filed after taking possession of and getting the flat registered.
Krishna Kishore Ganguly
Advocate, Kolkata
18112 Answers
438 Consultations

5.0 on 5.0

1. The language of the agreement will contain the answer to your query.

2. If the agreement places on your shoulders the liability to pay the taxes then you have to discharge this liability. 

3. If the builder has been made liable to pay the taxes then the builder cannot pass the same to you except by waiver on your part. 

4. It is unlikely that the builder will agree to share the burden of taxes if the agreement itself makes you liable. 

5. If the agreement is silent then the law of the land will prevail.

6. The doors of the consumer forum are open to you to seek a redressal only if the builder violates the agreement and not otherwise.
Ashish Davessar
Advocate, Jaipur
22963 Answers
631 Consultations

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