Indian Income Tax
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Refund In Service Tax India

The Service Tax is required to be paid only on the value of taxable service received in a particular month or quarter as the case may be and not on the gross amount billed to the client. However, in all such cases where the amount received is less than the gross amount charged/billed to the client, the Service Tax assessee are required to amend the bills either by rectifying the existing bill or by issuing a revised bill and by properly endorsing such charge in the billed amount. In case an assessee fails to do so, his liability to pay Service Tax shall be on the amount filled by him to the client for the services rendered.

Facility for adjusting excess payment of service tax by the assessee towards future liability is now provided for in the law. In cases, 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 can adjust the excess service tax so paid by him calculated on a pro-rata basis against his service tax liability for the subsequent period, provided that the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. However, the assessee is required to file the details in respect of such suo-moto adjustments done by him at the time of filing the service tax returns. In all other cases of excess payment, the refund claims have to be filed with the department.

The procedure for claiming refund for the amount due from the Department is as mentioned below:-

  1. Submission of application in prescribed Form-R in triplicate to the jurisdictional Assistant Commissioner.
  2. Application should be filed within the prescribed period, i.e. before the expiry of six months from the relevant date as defined in Section 11B of the Central Excise Act, 1944 which is made applicable to service refund matters also.

Application should be accompanied by documentary evidence to establish that the amount of Service Tax in relation to which such refund is being claimed has been paid by the assessee in excess and the incidence of such tax had not been passed on to any other person. The ''Relevant Date'' for the purpose of refund (under section 11B of Central Excise Act, 1944) is date of payment of Service Tax. Thus, the limitation period of six months is to be calculated from the said date.

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