Refund of Service tax Paid

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Ganesh Prabhu (Querist)
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05 March 2009 Vide Circular No. 108/02/2009 – ST dtd 29/01/2009, Service tax is not applicable on construction of a residential complex. My client had bought a residential flat in an apartment during 2007 towards which the builder had collected service tax.

My querry is whether my client can claim refund of the service tax already paid in view of the provision of the above said circular and if so, what are all the formalities to be complied with ? Can the builder refund the amount of service tax collected in earlier period ? What is the way out if he refuses to do so ?

My client does not provide any taxable services and hence is not an assessee under service tax law

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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15 April 2009 Normally the builder will not refund the taxes as he has paid the same to the Govt. To do so he will have to pay the buyers first and then claim the same.

The buyer can go for a refund- application under Form-R. Problems expected are that 1 year time limit maybe invoked. Normally woithout protracted litgation refunds are not given. Unless the same is a group action and claim amounts are at least 25-50 k there maybe no economic advantage of going for the same.

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