Eligibility of refund

[GANESH KANCHAN]

Based on recent circular filed application for refund of tax paid on construction services for last 4 years. But the departmentis of the opinion that: a) Refund is limited to tax payment made during last one year. b) Refund is eligible for developers and not contractors though the services related to Construction of residential flats. Is the department right ?

AI Summary

Eligibility for Service Tax Refund on Construction Services: One-Year Limit for Developers, Not Contractors. Complex Legal Issues Arise. A query was raised regarding the eligibility for a refund of service tax paid on construction services over the past four years. The tax department contends that refunds are limited to payments made in the last year and are applicable to developers, not contractors, despite the services being related to residential flats. A response suggests that the issue is complex and may require court determination. If the payment is considered a service tax, a one-year limitation applies; otherwise, a three-year period under the limitation statute may be relevant. Additional complexities may involve the transfer of tax burden to buyers.