Service tax payment

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22 December 2012
CAN I TAKE CREDIT OF EXCESS PAYMENT OF SERVICE TAX IN SUBSEQUENT MONTH.

Ugra Sen Singh

Ugra Sen Singh (Expert)
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22 December 2012 Yes you Can
Sub-rules (4A) and (4B) of rule 6 of the Service Tax Rules, 1994 which are relevant, read as follows.

“(4A) Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be.

(4B) The adjustment of excess amount paid, under sub-rule (4A), shall be subject to the following conditions, namely:-

(i) excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification,

(ii) excess amount paid by an assessee registered under sub-rule (2) of rule 4, on account of delayed receipt of details of payments towards taxable services may be adjusted without monetary limit,

(iii) in cases other than specified in clause (ii) above, the excess amount paid may be adjusted with a monetary limit of Rupees one lakh rupees for a relevant month or quarter, as the case may be,

(iv) the details and reasons for such adjustment shall be intimated to the jurisdictional Superintendent of Central Excise within a period of fifteen days from the date of such adjustment.”

As per the above sub-rules, the excess payment made can be adjusted only once with a monetary limit of Rs. 1 lakh. The assessee in the case cited above, will have to file a refund claim for Rs. 9 lakh with the Service Tax Department, as Section 83 of the Finance Act, 1994 reads, “83. Application of certain provisions of Act 1 of 1944 – The provisions of the following section of the Central Excise Act, 1944 (1 of 1944), as in force from time to time, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise: - 9C, 9D, 11B, 11BB, 11C, 12 12A, 12B. 12C, 12D, 12E, 14, [14AA]*, 15, 33A, 35F, 35FF to 35-O (both inclusive), 35Q, 36, 36A, 36B, 37A, 37B, 37C, 37D, [38A]* and 40.”