Refund of service tax.

[MANASH MUKHERJEE]

An assessee was providing service under a contract for construction of airport and have paid service tax accordingly. Now the assessee claiming refund of said service tax by virtue of notification no. 09/2016 dated 1.3.2016. In the said notification , however, there is no direct mention of refund. On the other hand , the notification gives an exemption with retrospective effect. What will be the actual procedure in the instant case , whether refund is payable or not.

[Ganeshan Kalyani]

Sir, for ease of understanding I would like to reproduce the relevant clause from the Notification no.12/2012 as below:

[14A. Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport or port provided under a contract which had been entered into prior to 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date:

provided that Ministry of Civil Aviation or the Ministry of Shipping in the Government of India, as the case may be, certifies that the contract had been entered into before the 1st March, 2015:

provided further that nothing contained in this entry shall apply on or after the 1st April, 2020;]

Sir, If the above conditon is satisfied in your case then the service as mentioned in your query is exempt after amendment and can be claimed as refund. Thanks.

[KASTURI SETHI]

SH.MANASH MUKHERJEE Ji,

I support the views of Sh.Ganeshan Kalyani, Sir. Further I intend to add that as per Section 102(3) of the Finance Act, refund claim is to be filed within a period of six-month from the date of enactment of Financial Bill, 2016 i.e. 14.5.2016. Therefore,you are required to file your refund claim before 13.11.2016.

Secondly, the principles of unjust enrichment are applicable. In other words, you will have to prove that burden of Service Tax has not been passed on to the consumer.

[MANASH MUKHERJEE]

Thanks to Sri Ganeshan ji & Kasturi ji for your answers.

Solicit, and will appreciate, useful info. / update on further developments, if any, in the aftermath of the Del. HC recent judgment in Bansals case, holding , ultra vies, the levy of 'service tax ' on deemed supply of services under an 'under-construction' contract.

[KASTURI SETHI]

Sir,

Govt. of India will not sit idle. No doubt appeal period is over but there is possibility that a copy of High Court order may have been received late in the Govt. office. So we will have to wait for.

[Ganeshan Kalyani]

Sir, yes sir there is no further development seen as yet on the decision passed by Hon'ble Delhi High Court in the case or Mr.Suresh Kumar Bansal .

Sri Kasturi Sir, you have right said that the department would not sit without action plan. They would definitely take some steps. We will have to wait till that time. Thanks.

AI Summary

Exemption for airport construction services may permit refund of previously paid service tax, subject to certification and unjust enrichment proof.
Notification exempts construction services for airports and ports where contracts were entered into before 1 March 2015, stamp duty paid and Ministry certification obtained; qualifying taxpayers may claim refund of service tax paid, subject to the Finance Act refund time limit and proof against unjust enrichment that the tax burden was not passed to consumers.