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Service tax

rohit (nil) (48 Points)

27 December 2011

IF THE TOTAL FEES TO BE PAID IS RS 33,000 TO AN EDUCATIONAL INSTITUTE& SOMEONE CHOOSES TO PAY IT IN INSTALMENT WITH RS 5,000 AS DOWN PAYMENT & REMAINING IN 4 INSTALMENTS OF RS 7,000 EACH MONTHLY AND IF HE DROP OUT TO TAKE SERVICES IN SUCH A CASE WHAT WOULD BE THE SERVICE TAX PROVISIONS

AND PLEASE TELL ME THAT IF I HAD PAID ONLY RS 5,000 AS INTIAL PAYMENT & DROP OUT TO TAKE SERVICES AND I WANT REFUND FROM THE SERVICE PROVIDER THEN WHAT WILL I GET AS REFUND :

A. RS 5000

B. RS 1600 ( 33,000 - 10.3% OF 33,000 )

C. NONE

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2 Replies

Sanket (Accountant) (23 Points)
Replied 27 December 2011

5000.00

if there is no service provided.

Even provider paid ST on such amount, he will get refund on cencellation of bill for services.

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CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 27 December 2011

I Agree with Sanket. You are eligible to get the full amount.

In the present case, Rule 6(3) of Service Tax Rules, 1994 will be applicable to the Service Provider, who in this case has not provided the service. Even if he has deposited the Service Tax with the Department, he can adjust the amount so paid in subsquent period if he refunds the full amount paid by you. Rule 6 (3) is produced below for reference:

"(3) Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received."