Service tax on cancellation charges

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This query is : Resolved

CA.Sagar Regmi (Querist)

25 April 2012 we have deducted cancellation charges when any customer cancel any flats from advance payments as we are covered under construction of complex service. I want to know whether cancellation charges covered under any category of service & why?

Pankaj Khodaskar

Pankaj Khodaskar (Querist)

25 April 2012 Does any one have format for auditor's certificate for Remittance on winding up/liquidation of Companies under FEMA regualtions? As per regulations, the certificate to state:

. Auditor's certificate confirming that all liabilities in India have been
either fully paid or adequately provided for.
. Auditor's certificate to the effect that the winding up is in accordance
with the provisions of the Companies Act, 1956.
. In case of winding up otherwise than by a court, an auditor's certificate
to the effect that there is no legal proceedings pending in any court in
India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)

26 April 2012 I understand that such cancellation charges are in the nature of transfer charges i.e. charges for changing the name and details of original buyer. In that case normally transfer charges are considered as part of sale consideration and it is liable to servic tax under Construction of COmplex service.

On the other hand department is issuing demand notices for such charges under category of 'real estate agents service'' which is not correct and subject to great litigation.

CA.Sagar Regmi

CA.Sagar Regmi (Querist)

27 April 2012 thanks nikhil ji...but i think cancellation charges are covered under business auxilary services..plz correct me if i am wrong..

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