05 March 2016
sir We have paid service tax on advance room charges received and during the month in which these room charges are billed we paid full service tax on room charges my mistake instead of deducting the advance already paid. My query is can we use this advance service tax paid under room charges category to make payment of service tax under restaurant or taxi service category.
05 March 2016
The three services you have referred to have different rates of abatement. As far as Taxi Charges are concerned, Rent-a-Cab is covered under Reverse Charge Mechanism - after 50% abatement the service recipient pays the tax. It would not be advisable to adjust the amount paid against this service.
This should have been the first paragraph, but intentionally I am mentioning it now. The Department is mainly concerned with the revenue collection, and not the head under which the tax is paid. There is an internal departmental circular, advising the field formations not pursue matters where the accounting code is wrongly entered, but the correct duty due has been paid. Further, except in case off audit, the department does not insist on hard copies of the e-challan. You may therefore adjust the advance payment on room rent against restaurant service.
Renting of rooms in hotels is taxed after 30% abatement and restaurant services after 60% abatement. Hence the tax liability on the same quantum of turnover varies. Therefore, either before or preferably after adjusmetnt is made, write a letter to Accounts Officer, Service Tax Commissionerate through your Range Superintendent, mentioning the challan number (full CIN) and amount,enclosing a copy and stating that due to clerical error, the accounting code was wrongly put and the duty paid may be adjusted against the correct code [state the correct code].
This would solve the technical issues with the department and your excess paid would be adjusted both in your accounts and in your ST - 3.
CAclubindia
