17 October 2013
a firm is receiving the two services and is liable to make payment under partial reverse charges- 1- works contract service- S.tax Rs.30000 in month of may 2013 2- manpower service- S.tax Rs.40000 in month of may 2013 Problem- said firm has deposited the all service tax on the works contract head amount rs 70000
now what are remedy for above problem ? 1- Can firm take refund of excess amount of rs 40000 from works contract after depositing s.t. in manpower, what is refund process ? 2- can firm adjust such payment in future months what process ? 3- can firm set off the s.t payment of june 2013 what process ?
17 October 2013
In the first instance, recovering money from the Central Excise Department is next to impossible. Therefore it is advisable not to seek a refund.
It is not clear whether the tax was paid by one challan or two.
Two options are available -
First, pay the amount of ST under Manpower Supply Service. If the payment is made on current date depending on the status of the assessee you will have to pay interest @18%p.a from 6th June 2013 or 6th July 2013 on daily balance basis. Treat the amount paid under Works Contract as advance and show the same in the ST-3 return under the advance payment head. Adjust the advance payment under the head Works Contract in the payment due for October 2013, if you have not already paid the tax due for September 2013. Otherwise adjust it against the payment due for September 2013 and no interest will be leviable. The adjustment can be made for any month till September 2013 if it remains unpaid and show the relevnt entry under payment by cash in the ST-3 Return.
Second, there is a Departmental letter to the field formations that if the ST due has been paid even under a wrong code, the Range Superintendent can inform the AO to rectify the same. Write a letter to the Range Superintendent and mark a copy to the AO as advised by him. This is the easier way out - no penalty for non payment of service tax or late payment will aeise.
18 October 2013
Advance payment of Service tax can be set off either in the same ST-3 Return period or subsequent periods.
To avail of advance payment credit the ST-3 Return of the relevant period (April to September 2013) should show the advance payment of ST,EC & SHEC along with the CIN in the advance payment section in the month of payment i.e.May 2013.
The advance payment can be utilized to pay off the ST liability in subsequent ST-3 Return period (Oct 13 to Mar 14) or subsequently too by filling in the payment details in the month the advance is adjusted in the Challan Service section of ST-3.
Departmental letter to field formations have asked the Range Superintendents to seek written confirmation from the assessee for subsequent period adjustments and hence it would be advisable for the assessee to send a letter to his Range Superintendent enclosing a copy of the challan immediately after adjusting the credit.
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