07 March 2015
Dear expert, i have paid ST on behalf of my debtors. on 4/10/2013. since than my debtors has not paid my bill amount. now i am going to declare his defaulter and will TRF his amount in bed debt.
my Question is. can i adjust that ST amount which i had paid on behalf of my debtors, but the fact that debtors has not given neither my service charges nor service tax amount.
07 March 2015
•Service tax is a levy on services provided or to be provided. •Service tax is payable at the Point of Taxation, as defined. •If service is not provided, either wholly or partly, but service tax has already been paid, such service tax paid can be availed as credit and used for any other service tax liability. •Other excess payments can be adjusted upto Rs.2,00,000 •But, there are no provisions if service tax has already been paid but the payment has not been received. For example, if the service is already provided and the invoice has also been issued, service tax would have been paid on the same, at the time when the service is provided or at the time when the invoice is raised, whichever is earlier. But if the payment is not at all received subsequently, there is no provision to claim adjustment / refund of the service tax already paid. Such service tax could not be covered under Rule 6 (3) of the Service Tax Rules, 1994 as the service has been provided. It cannot be covered under Rules 6 (4A) / (4B), as it is not a case of any excess payment of service tax. The service has been provided and hence the taxable event has happened. As the point of taxation has also occurred, service tax has also been paid. So, it is immaterial, whether the payment is received or not. •Hence the ST amount paid on behalf of the debtor cannot be adjusted.
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