Service tax on flat booking cancellation charges collected
This query is : Resolved
tarsem kumar
(Querist)
14 December 2013
Dear All
We are a real estate/construction company dealing in developement of group housing societies. When customer cancel their booking then we charges a damange compensation against their booking cancellation.
My query is that, are we liable to pay service tax on such amount forfeited on cancellation.
We are not collecting S. TAX from customers on the view that it is not any kind of service provided.
Thanx in anticipation...
We are a real estate/construction company dealing in developement of group housing societies. When customer cancel their booking then we charges a damange compensation against their booking cancellation.
My query is that, are we liable to pay service tax on such amount forfeited on cancellation.
We are not collecting S. TAX from customers on the view that it is not any kind of service provided.
Thanx in anticipation...
Annu Agarwal
(Expert)
15 December 2013
As per my view,you are correct in not collecting service tax from customers.
Firstly,you are not providing any services against these charges.
Secondly,service tax is levied on consideration not on compensation charges.
Firstly,you are not providing any services against these charges.
Secondly,service tax is levied on consideration not on compensation charges.
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