I booked flat in Noida in the year of 2011 and buyer-builder sale agreement was executed in May 2012. There is one provision in BBA as reproduced below: "That the Flat Allottee (s) specifically agree/s to pay directly or if paid by the Developer then reimburse to the Developer on demand, all government charges, levies, service tax, any other charges, fees, taxes etc. leviable in future on the said Land and/ or said Complex to be constructed on the said Land or the said Flat as the case may be, as assessable/applicable from the date of allotment of the said Flat to the Flat Allottee (s) and the same shall be borne and paid be the Flat Allottee (s) in proportion to the super area of the said Flat. If such charges are increased (including with retrospective effect) after the sale deed has been executed, then, such charges shall be treated as unpaid sale of the said Flat and the Developer shall have the first charges / lien on the said Flat for recovery of such charges from Flat Allottee(s)." The builder handed over key of flat in October 2017 after full & final payment including applicable tax as per BBA in May 2017. The builder has provided provisional possession letter in January 2019. Now, after lapse of more than 1.5 years, the builder has demanded VAT. Please advise whether the demand of builder for reimbursement of VAT is legally tenable.
Under BBA agrement signed by you in 2012 you are liable to pay all government levies , taxes levied on said flat
2) you can take the plea that you have already paid applicable taxes at time of handing over flat
3) ask builder to furnish basis of which additional demands have been made
3) if demand is for reimbursement of VAT ask for supporting documents that VAT has been paid by builder
Please advise ...can the builder transfer the liability of labour cess and claim from the buyer after handover of flats.
1) Here if the property is registered in the year 2012, Then the VAT 2012 year will be applicable to your transaction and not on which future date he had handover the key to you.
The Labour Welfare Cess is being collected by the government for providing welfare to unskilled workers. It is supposed to be 1% of the construction cost levied on the builder.
2) it is liability of builder to pay this tax for welfare to his labourer,
3) in your case your agreement mentions that you would be liable to pay such levies imposed by the concerned local authority and / or Government and/or other public authority
4) hence the builder is seeking to recover the amount of cess from you .
5) in the event builder fails to pay the cess it would be recovered from the flat owners .
6) you can pay the amount under protest take possession of flat and then move consumer forum against the builder and seek refund as it is basically liability on the builder
If the builder has sent a notice to this effect, you may issue a reply notice denying his claim.
You may invoke the said clause in your reply rejecting his claim.
Let him approach court where you can fight it out against him.
If the builder is due for it from the buyers as per the agreement, then he can claim the same at a later date also.
No such charge can be legally levied by the builder.
Regards
The demand for applicable taxes in form of vat or gst is valid. But it should be legally applicable in your case
