19 April 2012
Dear Professional Colleagues, I am having query regarding service tax. My company has not taken service tax registration under service tax till feb 2012 end but it was liable to pay service tax. Company has taken registration only in the month of march 2012 and has paid service on his service tax liability for whole year. Now company wants to recover service tax from client but clients are refusing to pay service tax since as per clients company was not registered for service tax till feb whereas services were provided before taking service tax registration( Suppose services were provided in Jan 2012 month). Give your opinions friends what company has to do whether it can recover service tax from clients or not and what company has to do now.
19 April 2012
Mayank, Before replying answer to your query kindly give me followind details. 1) consitution of the assessee 2) Type of services provided 3) Turnover of the assessee in the immediate p.f.y
Why this is because once the assessee is liable to pay service tax then he/she/it have to pay service tax on amount charged in invoice after Rs. 10 lac. now suppose in ur case if ur assesees's is the first year of service then assessee will be liable to pay s.tax on the amount collected/charged after crossing the specified limit. Provided he/she/it have not charged service tax during the year. for e.g if turnover upto march 31 is 1100000 then on Rs. 100000 (11-10) service tax has to be paid. In your case assessee has paid service tax for the full year, even though liable for amount exceeding 10lacs. so the excess amount can be shown as advacne but that all depends on which type of service u are falling in. under some service you can take credit where as under some you cant. So before filing return you have to check whether the service provided by you is eliigile to carryforward the same or not.
Company has paid the Service tax after claiming exemtion of Rs. 10 lakh. But the problem is suppose company is having the ST liability of Rs 30 lakh out of which it has claimed exemption of Rs. 10 lakh and paid Rs. 20 lakh from it's own pocket then what is d procedure to recover such amount from client. How can company recover it ???
19 April 2012
Dear Mayank, Per my view company has only option to request its customer to pay the same. As far as i am aware, ther is no such legal provision in the Act to recover the amount which you are talking about. Still if i find the similer case law will share with you.Also will discuss it with some of my colleagues and if something comes will let you know. Best luck.
CAclubindia
