Service tax deduction from the builder

This query is : Resolved

Sumarani Y (Querist)
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06 January 2012 Hi,

This is Suma from Bangalore. I work as Assistant Manager - HR for a Software Company in Bangalore. My query is regarding the Service Tax deduction from the builder.

We had booked a flat in Konnagar (West Bengal) in the month of November 2011. But for some reason loan did not get sanctioned and we had to cancel the booking. During the cancellation, around 60,000/- had been deducted against the service tax for the property we have booked. When I consulted with my Charted Accountant here, they said I should very much get that refund from the builder. But Builder is saying, ST is already been deposited (Online Deposite) to the government and refund is not possible.

Please assist me whether i am eligible to get it back from the builder as I am not using the services of the property.

Waiting for the response from your end.

Regards,
Suma

hanish

hanish (Expert)
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16 January 2012 Hi Suma,

You can rightly claim the service tax since you have not received any service from the builder.

Rule 6(3) of the Service Tax Rules, 1994 states that in case the services are not provided by a service provider but service tax has been discharged on such services, the service provider would be able to take the credit of service tax paid by him and adjust against any other liability

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Sumarani Y

Sumarani Y (Querist)
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16 January 2012 Hi Harish,

Thanks for your response. It is been very useful for me.
Any action in this case needs to be taken from the builder, right? In case if they are not agreeing and supportive, how can we get the money back?
The building is still under construction and the pocession was in April 2012. As we have withdrawn the booking, this will not be applicable for us. That's how I assume that, we have not availed any kind of services from the property or the builder. Please correct me if I am wrong.

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