Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 ITR Filing 2025: These individuals are exempt from paying tax. Do they need to file returns?
 Full List Of Trump's Reciprocal Tariffs Announced Wednesday
 Top 5 tax-saving investment options for salaried individuals to consider before March 31, 2025
 5 lesser lesser-known avenues of tax saving you can use to save income tax before March 31, 2025
 March 15 is deadline for last advance tax installment: Know if you must pay

Want to claim service tax refund?
December, 12th 2013

Potential homebuyers can breathe a little easier. And, ones who have already bought a house can look forward to an unexpected ‘bonus’, if they apply for a refund from the service-tax department.

The customs, excise and service tax appellate tribunal had recently given a decision that home buyers would no longer have to pay the service tax — 12.5 per cent — on the lumpsum deposit they pay to the builder for maintenance. The decision is yet to be challenged by the central excise department in a higher court. But the question is how do they apply for a service tax refund?

Prashant Deshpande, indirect tax director, Deloitte, said the tribunal’s decision was good for the buyer but the process of getting the refund is not something many buyers are aware of. Many experts said since the builder (the assessee) pays the service tax, it might be a more complicated process when the buyer goes to claim the refund.

“Even if we pay excess service tax, it normally gets adjusted with future payments. So, most of us really aren’t aware how to claim a refund,” said a chief executive of a financial firm.

Despande said if the builder had already paid the service tax to the department, buyers would have to use the refund application format in which they have to give the registration number of the builder, along with other details.

Of course, there would be additional pain if the builder was registered in a completely different city. Also, the buyer can only claim the refund within one year of the payment of service tax. The basic guidelines for refund of service tax, for ones who have paid in excess, said the application has to be made in triplicate with the assistant or deputy commissioner and accompanied with documentary evidence.

This one-time maintenance deposit is paid by the buyers to the builders for maintenance and repairs are conducted till the residents form a society. The amount in the question can be as high as Rs 4-5 lakh per flat. So, the refund can be as high as Rs 50,000 – Rs 60, 000 or even more.

Says Harsh Roongta, chief executive officer of Apnapaisa.com: “The main argument against this service tax was that buyers give the corpus (deposits) to the builder who ultimately passes it on to the society. So, there shouldn’t be a tax on it.”

For buyers, it is a reasonably good relief though not a massive one. With the Reserve Bank of India tightening home loan guidelines, buyers anyway have to cough out 80 per cent of the property cost and stamp duty and registration charges separately. After this, builders demand such deposits. In other words, to buy Rs 50-lakh property, a potential buyer needs at least around Rs 15-18 lakh in their bank account. But small reliefs like these would make their life a little easier.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2025 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting