Service Tax

My client is a company and distributor of mutual fund. He receives commission from AMCs on selling of mutual fund.

 As per service tax act Asset Management Companies deduct Service Tax at source and deposit the same to Government

Suppose he receives Gross commission of Rs. 1 Crore. The AMC will deduct Rs. 12.36 lacs as service tax and pay to the government on behalf of my client.

Now he incurred various expenditure to run his business and pay service tax on various expenditures (like telephone, insurance, C.A. fees etc). The service tax amount on such expenditure comes to Rs. 2.47,200.

Now this scenario will go on and on as service tax deducted and paid will be always higher then what he pays on expenditures.

In normal circumstances if an assessee receives service tax on income then he can claim the cenvat credit of service tax paid on expenditure and pay the balance amount to govt.

However in case of mutual fund agents the service tax is deducted from commission itself and paid by AMC. He has no option to claim cenvat credit on service tax paid on expenditure.

So in above circumstances what is the remedy available to the client to get the rebate/refund of service tax paid on various expenditures?

I will be highly obliged if anyone can guide me in the matter.

With regards,

Jaimin Deliwala. C.A.