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Tribunal overturns denial of service tax refund for flat purchase pre-completion certificate The tribunal set aside the lower authorities' decision denying the appellant's refund claim for service tax paid on the purchase of a flat in a ...
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Tribunal overturns denial of service tax refund for flat purchase pre-completion certificate
The tribunal set aside the lower authorities' decision denying the appellant's refund claim for service tax paid on the purchase of a flat in a residential complex before the issuance of a completion certificate. The tribunal remanded the matter for reconsideration by the adjudicating authority in light of a Supreme Court judgment cited by the appellant, which supported the argument that services should be considered provided from the agreement date until the certificate issuance date.
Issues: 1. Whether service tax is payable on the purchase of a flat in a residential complex before the issuance of a completion certificate. 2. Whether the appellant is entitled to a refund of service tax paid.
Analysis: 1. The appellant entered into an agreement with the developer for the purchase of a flat before the issuance of a completion certificate. The service tax was charged by the developer and deposited with the exchequer. The lower authorities denied the appellant's refund claim, stating that the services were to be considered as declared services under Section 66E, making the service tax payable due to the absence of a completion certificate.
2. The appellant contended that the building was fully complete and ready for possession and use, except for the issuance of the completion certificate. However, the definition of declared services requires the issuance of a completion certificate by the competent authority. The tribunal found no merit in the appellant's argument that the certificate was delayed due to the State Environment Appraisal Committee's non-functioning.
3. The appellant argued that since the agreement was entered into before the issuance of the completion certificate, the services could only be considered provided from the agreement date until the certificate issuance date. The appellant cited a Supreme Court judgment to support this argument. The tribunal acknowledged this argument and remanded the matter to the original adjudicating authority for reconsideration in light of the Supreme Court decision.
In conclusion, the tribunal set aside the impugned order and directed a re-decision by the adjudicating authority considering the Supreme Court judgment cited by the appellant.
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