Cancellation charges

Neethu (CA) (138 Points)

25 October 2012  

When a customer cancels booking for purchase of flat after having paid a few installments, the builder does not refund full amount of advance received from the customer.In other words, while granting refund to the concerned customer, the builder usually deducts some amount in the name of ' Cancellation Charges'. Under the new regime of taxation, whether amount retained by the developer on account of cancellation charge is liable to Service Tax?