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 ?

[Surender Gupta]

The query involves is complex issue which is to be determined by the courts that what is the nature of amount paid on construction of residential flats. If the nature is service tax, period of limitation of one year is application. But, if the same is merely an amount instead of tax, period of limitation under limitation statute would be applicable i.e. 3 years. The issue may involve further complexity such as the passing of burden or incidence of service tax to the buyer or other person.