It is illegal to levy 2 percent tax on land purchase at the individual level


The High Court has ruled that the collection of 2 percent VAT (Musak) at the individual level is illegal in the matter related to land purchase.

As a result of this ruling, 2 percent VAT (Musak) cannot be collected from common people except developers in case of land purchase.

According to the VAT Act, this VAT can be collected only from the developers. But since 1991, 2 percent VAT is being charged on the purchase price of land from all persons, which is illegal.

Lawyer Barrister Mahbub Shafiq confirmed the verdict to Jago News.

He said that Pragati Insurance Limited had charged VAT at the rate of 2 percent from them while purchasing the land. A writ petition was filed in the High Court challenging the validity of the said VAT levy. In 2022, the High Court issued a ruling on the hearing of that writ.

Justice Zafar Ahmed and Justice Sardar of the High Court on Thursday (June 6) regarding the final hearing of the ruling. A bench consisting of Rashed Jahangir passed the verdict.

Barrister Mahbub Shafiq heard the writ in the court today.

He said, as a result of this verdict, Pragti Insurance will have to return the 2 percent VAT within the next three months. At the same time, the court has ordered to issue instructions to the concerned authorities for the people.

FH/MKR