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Is service tax refundable in cancellation of unregistered flat


02-May-2023 (In Tax Law)
Hi, Please help me for the mentioned issue. We had booked 1 BHK flat on June 2017 for which we have paid INR 51000 booking amount. INR 83000 as service tax. Due to our weak financial status we were struggling to get housing loan however we did not financed by any of financial institutions. Now we have cancelled booking and asking for refund of INR 1.33 lac but builder has denied by saying that we have paid service tax to government that will not be returned. When we asked for receipt of paid service tax then he said there is no individual receipt of customer. Lastly, is it possible that service tax can be paid without registration of flat.
Answers (2)

Answer #1
681 votes
I have gone through your query. it seems that the builder has paid the Service Tax. the registration of flat and payment of service tax are two different things. builder has to pay service tax once he receive the payment from the customer. so, he might have been paid the service tax. however, it is possible that you can get the refund from him because even if you have cancelled the booking then he may sale it further to different customer so o one booking he cannot pay service tax twice, so he has to give you refund of service tax once he book the flat which you have booked the flat earlier to someone else.

ask him that so far we have cancelled the booking, collect the same amount from next proposed customer and give it to you.

in case he failed to do so, then approach the jurisdictional assistant commissioner of Service Tax (now central tax GST) and inform him the situation with a proof of your cancellation, he will tell you the way to get the legitimate way of getting the refund
Answer #2
723 votes
Yes it is refundable to you.
The service tax can be paid by builder even before sale of flat, against the invoice.
In case the builder had already paid the amount to government, the same can be adjusted by him in his next month's return against his service tax payable and amount paid by you can be returned to you, as it represents payment against service which is now cancelled.

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