Builders, contractors and
developers with annual turnover of more than Rs. 10 Lacs have to seek
registration and make payment of VAT under DVAT 2004. This is as per a public
notice by the department of trade and taxes, Government of NCT of Delhi.
The notice further
announces that in the cases where construction of property is done through Collaboration/
Development agreements, express or implied, such builder or developer is
required to make payment of VAT.
The owner of a property is
not liable to seek registration under VAT. However he will be treated as a
deemed contractor if the building/portion of building has been sold to
prospective buyers before completion.
The department has
collected information of the building plans sanctioned by MCD, NDMC and DDA
etc. Notices are being issued to the owners of the properties requesting them
to provide the names of Contractor/ Developer / Builder and Collaborator etc.
and details of payment made to such persons.
According to the notice,
VAT liability is only on the contractor, builder, developer or collaborator as
the case may be. However, in case of non-submission of information by the
property owner, especially in cases where property is not under self-se, it may
be presumed that he himself is a developer for the prospective buyers of the
property and he thus becomes liable for payment of VAT.
The owners of properties
have, therefore, been requested to provide the desired information as and when
it is called by the department.
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