Ritesh khurana (CA student) (175 Points)
09 November 2011is service tax charged on booking of new flats by construction co. which yet to be constructed , if yes in case of cancellation of booking refund to customer will be without service tax or with service tax. and for next booking of same flat service tax will be charged or not .
Kindly advise
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 09 November 2011
construction of residential complex has been brought to tax net from 1/7/10.
whether service tax is applicable on cancellation of booking refund is an issue not free from debate. In my view, there is actually no rendition of service. But difficult to prove in departmental proceedings -- the acse is indeed litigation prone. Is it, by the way, business auxiliary service ?
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 09 November 2011
Although it is refundable, since developers paid the tax to government, normally tax amount may not be refunded. For subsequent booking, tax will have to be paid afresh.
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