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Excess service tax.

Mayank agarwal (Student) (45 Points)

17 October 2013

An assessee who has collected ST frm a client is unable to perform the service. briefly explain the situations in which and d the conditions subject to which he can adjust the ST relating to above, agnst his forthcoming service tax liability. It is a question frm practice manual. I have d answer but im not able to grasp it fully. What i understood is dat he can adjust it on pro rata basis. Is that all?? Can u plz tell me in sum simple language. Im getting confused here. Please help. :(

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 17 October 2013

The excess service tax can be adjusted as per Rule 6(4A) of STR, 1994 against the service tax liability of next months/quarters......there is nothing like that adjustment will be pro-rata basis.....i~~t was eariler before 01.04.2012...~~

Suppose you raised an invoice with ST Rs. 1 lacs in Sep and paid the ST in Oct ...but in Oct end the deal get cancelled , in this case the excess tax Rs. 1 lacs which u have paid can be adjusted in next periods.....

But excess tax paid by wrong interpretation of law or by non-availment of Cenvat credit or by forgoing benefit of an abatement/exemption cannot be adjusted ....beacause Rule 6(4B) specifically restrict these cases ....

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