25 September 2012
I want to ask if a consultant/Professional services provider raises an invoice including services tax. Can he reverse service tax in his books and pay full amount to his customer.
For e.g. if “A” company/Firm issued an invoice of amount 56180 (50000+ stax-6180 =56180) in Apr’12 to “B” an individual, for services and assures him if he is not able to complete the task in future. He will refund complete fees to “B”, which “A”is not able to complete in say February’13(Same F/y). So can “A” refund “B” full amount of invoice i.e.56180 and reverse service tax amount in his books as adjustment/sales return or Is “A” can refuse to pay service tax part amount to “B”, saying that he had deposited the amount with government (Service tax deptt.)?
26 September 2012
As of now the law has not provided for 100% write off. However where the same is renegotiated then the credit for the unpaid amount is available.
However where within the tax payment period of 1 month or 3 as the case maybe the bill can be reversed entirely as the entire amount was paid back.
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