Claiming Service Tax; Paid to Developer

Have you heard about the High Courts decision on Service Tax that you paid as a buyer to the developer. After all it is your hard earned MONEY why would you let it go.

What the High Court Has Ruled:

The Delhi High Court has in a recent case Suresh Kumar Bansal vs Union of India has clarified that no service tax can be levied on flats purchased prior to June 1, 2012.  Though the Hon Court clarified that the legislature is competent to levy service tax on sale of under construction flats, since the Act or Rules do not specify a mechanism to determine the value of service tax on under construction flats.

This has to be refunded to the petitioners with interest after due scrutiny of whether has being actually deposited by the developers.

How To Get Your Service Tax

1. Form a group of residents interested in seeking refund and compute the service tax paid by each flat buyer.
2. Collate the flat buyer agreement and invoices raised by the developer and receipts confirming the payment of such invoices.
3. Approach the developer with a copy of High Court order.
4. Ask for a copy of service tax returns filed by the developer along with challans for deposit of tax.
5. Get an undertaking or affidavit signed by the developer that entire service tax collected has been duly deposited with the government.
6. Approach the service tax authorities with the above documents and seek refund of the service tax amount.

Best of luck and do come back and share with us your experience which would help others too. In-case of any questions do not forget to post them below.