refund to customer by service provider

This query is : Resolved

KETAN MEHTA (Querist)
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21 January 2011 A customer agrees to receive the service and accordingly he pay for the same & service tax for the same is paid to govt. , Now after wards customer dis agrees to get the services & asking the refund. Customer is correct since he has not availed the service provider have to refund the same but what treat-ment for service tax - can any body advice

Pradeep Kamath

Pradeep Kamath (Expert)
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21 January 2011 As per subrule (3) of rule 6 of the service tax rules, 1994, Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received.

So you may adjust the service tax already paid, against your future service tax liability.