Mumbai Real Estate Developers Flout SC Order, Collect LUC Tax from Homebuyers
Despite a Supreme Court order, some Mumbai real estate developers continue to collect LUC tax from homebuyers, causing financial burden and harassment.
Mumbai Real EstateLuc TaxSupreme Court OrderHomebuyersMchiReal Estate MumbaiSep 17, 2024
In 2015, the Supreme Court had ruled that real estate developers cannot collect LUC tax from homebuyers, as it is the responsibility of the contractors and sub-contractors to pay this tax. However, it appears that some real estate developers in Mumbai are still collecting this tax from homebuyers, causing financial burden and harassment.
According to reports, several homebuyers in Mumbai have complained that real estate developers are still collecting LUC tax from them, despite the Supreme Court order. This tax is typically collected as a part of the overall cost of the property, and can range from 1-2% of the total cost.
The collection of LUC tax by real estate developers is not only illegal but also unethical. It is causing financial burden on homebuyers, who are already struggling to pay the high costs of property in Mumbai. Moreover, it is also affecting the credibility of the real estate industry as a whole.
The Maharashtra Chamber of Housing Industry (MCHI), a trade body that represents real estate developers in Maharashtra, has stated that it is not aware of any real estate developers collecting LUC tax from homebuyers. However, homebuyers have complained that several developers are still collecting this tax, and that the MCHI is not taking adequate action to stop this practice.
The MCHI is a trade body that was established in 1980 to promote the interests of real estate developers in Maharashtra. The organization has over 1,000 members, including some of the biggest real estate developers in the state.
In order to stop the collection of LUC tax by real estate developers, homebuyers are advised to carefully review their agreements and contracts before signing them. They should also ensure that the developer is not collecting any taxes that are not legally permissible.
Moreover, homebuyers can also file complaints against real estate developers who are collecting LUC tax, with the relevant authorities such as the Maharashtra Real Estate Regulatory Authority (MahaRERA) or the Consumer Court.
In conclusion, the collection of LUC tax by real estate developers in Mumbai is a serious issue that needs to be addressed. Homebuyers should be aware of their rights and should not hesitate to take action against developers who are collecting this tax.
Frequently Asked Questions
What is LUC tax?
LUC tax, or Labour Welfare Cess, is a tax that is payable by contractors and sub-contractors on the construction of buildings.
Can real estate developers collect LUC tax from homebuyers?
No, according to a Supreme Court order, real estate developers cannot collect LUC tax from homebuyers.
What is the Maharashtra Chamber of Housing Industry (MCHI)?
The MCHI is a trade body that represents real estate developers in Maharashtra.
What can homebuyers do if they are being charged LUC tax by a real estate developer?
Homebuyers can file a complaint with the relevant authorities such as MahaRERA or the Consumer Court.
Is the collection of LUC tax by real estate developers legal?
No, the collection of LUC tax by real estate developers is not legal, as per the Supreme Court order.
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