Sir,
My friend is engaged in the business of construction of residential complex and commercial complexes and accordingly got himself registered under Service Tax in the last year. His firm is also availing cenvat credit of service tax paid of input services used in the construction work. Out of total 62 residential blocks, he obtained completion certificate for 30 blocks from the competent authority of municipal corporation. Meantime, the audit team of the excise department undertook audit of the financial records and ST-3 of his firm. During the course of audit, the audit team asked him to deposit the service tax on advances received from the prospective buyers before completion of the said blocks sold with interest and reverse the cenvat credit availed on input services used in remaining under construction blocks.
Your valuable suggestion and guidance is required as first time service tax audit is being done to my firm.
Thanks With regards
Sami Ansari.