CESTAT Allows Service Tax Refund On Construction Services Of Complex Provided By The Cooperative Housing Society
Mariya Paliwala
17 April 2023 10:52 AM GMT
The Ahmedabad Bench of the Customs, Excise, and Services Tax Appellate Tribunal (CESTAT) has allowed the service tax refund on the construction of complexes provided by the appellant’s cooperative housing society.The bench of Ramesh Nair (judicial member) and C.L. Mahar (technical member) has noted that cooperative societies have not taken the services of a contractor for the construction...
The Ahmedabad Bench of the Customs, Excise, and Services Tax Appellate Tribunal (CESTAT) has allowed the service tax refund on the construction of complexes provided by the appellant’s cooperative housing society.
The bench of Ramesh Nair (judicial member) and C.L. Mahar (technical member) has noted that cooperative societies have not taken the services of a contractor for the construction of residential complexes but have chosen to construct complexes on their own. Where they have taken a service from the contractor, society has handed over the land to the contractor, and the contractor provides the service to the individual who purchases the residence. In all these cases, the transaction is between the members of the society and either the society or the developer.
The appeal was directed against the order in which the adjudicating authority confirmed the demand for service tax along with interest and penalties under the category of construction of complex service." The adjudicating authority precisely held that the cooperative society of the members has provided complex services to its members and is liable for service tax.
The appellant contended that the service provided by the cooperative societies to its members involved mutuality of interest; there is no relationship of service provider and service recipient between the cooperative societies and its members, therefore, the same is not liable to service tax.
The appellant submitted that the service provided by the Co-operative Housing Society to its members is not liable for service tax.
The tribunal remanded the matter back to the original adjudicating authority in view of the fact that the unjust enrichment aspect will have to be examined before granting a refund and also for verification of the correctness of the claim.
Case Title: Shantanu Co Operative Housing Society Limited Versus Commissioner of Central Excise & ST, Ahmedabad
Case No.: Service Tax Appeal No. 248 Of 2012-Db
Counsel For Appellant: Rahul Patel
Counsel For Respondent: Kalpesh P Shah
