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Service tax on under construction flat

Swapnali Joshi (Accountant) (41 Points)

12 July 2016

We have collected service tax on our under construction building flat holders. The building is completed 2 years before. that time we collected service tax and paid to government. now flat holders asking for refund claiming under judgment of delhi court of non applicability of service tax?? whether to refund this amount to flat holders, as we have paid it to government.....and filed the return.....

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (193731 Points)
Replied 12 July 2016

If you wish to pay back, no problem; but no such notification issued by any Governmental agency, for non-collection of any further service tax or refunding back old collection on under-construction properties. At present you can give them copy of challans, or returns, where in you have paid the collected amount to treasury. Convey them that you are only intermediate in the issue; so let them apply collectively for refund of the amount from the office of Commissioner of Central Excise & Service Tax; Pune Zone.

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 12 July 2016

There is no direction/notification regarding refunding of service tax collected and deposited prior to the judgement in respect of under construction buildings. You were merely acting as a collecting agent on behalf of govt. You cannot claim refund of service tax paid as the doctrine of unjust enrichment will apply. Tell the customers to apply for refund to the concerned divisional office.