How to get refund of service tax paid- cancel of invoice

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 May 2012 Sir,

We have registered with service tax as " Management consultancy" and raised our invoice in March 12. Now our client is not accepting our bills , which is raised by charging 10.30%.

We have paid the Service Tax within due date in April and filed our ST3 on 20.04.2012.

Now we have to cancel the Invoice and how can we get the refund of service tax payment.

Please give opinion.

Arun Gulati

Arun Gulati (Expert)
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19 May 2012 Read rule 6(3) of the service tax Rules, 1994. you can take credit of such tax paid.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 To obtain a refund of service tax paid when an invoice is canceled, you need to follow a specific process under the Service Tax rules. Here’s a step-by-step guide to help you through this process:

### **1. Cancellation of Invoice**

Before you apply for a refund, ensure that the invoice is properly canceled in your records:

- **Issue a Credit Note:** If the service provided is canceled or not accepted, issue a credit note to the client against the invoice. The credit note should reference the original invoice and clearly state the reason for the cancellation.

### **2. Adjust Service Tax Liability**

You need to adjust the service tax liability in your records before applying for a refund:

- **Amend Your ST-3 Return:** If the invoice cancellation is done before the filing of ST-3 for the relevant period, adjust the service tax liability in the same return.
- **Refund Application:** If the ST-3 has already been filed and the refund application is needed, follow the refund application process.

### **3. Apply for Refund**

To apply for a refund of the service tax paid, follow these steps:

#### **Step 1: Prepare the Refund Application**

1. **Download the Refund Application Form:** Obtain the refund application form from the [CBEC-GST website](https://cbec-gst.gov.in/) or the [GST Portal](https://www.gst.gov.in/). The relevant form for service tax refunds is typically **ST-1**.

2. **Complete the Form:** Fill out the form with the following details:
- Details of the service tax paid.
- Details of the credit note issued for invoice cancellation.
- Refund amount claimed.
- Bank details for refund payment.

3. **Attach Supporting Documents:**
- Copy of the original invoice.
- Copy of the credit note issued.
- Proof of service tax payment (challan copies).
- Copy of the ST-3 return filed for the period.
- Any other documents as required by the authorities.

#### **Step 2: File the Refund Application**

1. **Submit Online (if applicable):** Some regions allow online submission of refund applications. Log in to the CBEC-GST portal or the GST portal and follow the instructions for online submission.
2. **Submit Physical Copy:** If online submission is not possible or required, submit the completed refund application form and supporting documents to your local Service Tax department office.

#### **Step 3: Follow Up**

1. **Acknowledgment:** Obtain an acknowledgment receipt of your refund application from the Service Tax department.
2. **Track the Refund Status:** Follow up with the department to check the status of your refund application. They may request additional information or clarification, so ensure timely response.

### **4. Additional Considerations**

- **Timing:** Make sure to file your refund application within the prescribed time limit as per the regulations. Typically, the refund application should be filed within one year from the date of payment of the service tax.

- **Consult a Professional:** It may be beneficial to consult with a tax professional or consultant to ensure that all necessary documentation is correctly prepared and submitted.

### **Summary**

1. **Issue a credit note** for the canceled invoice.
2. **Adjust your service tax liability** in your records and/or ST-3 return if applicable.
3. **Apply for a refund** using the appropriate refund application form, either online or physically, with all required supporting documents.
4. **Follow up** with the Service Tax department to track the status of your refund application.

By following these steps, you can successfully claim a refund for the service tax paid on a canceled invoice.

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