Excess payment of service tax

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Satendra Tyagi (Querist)
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15 December 2011 Assesee has issued a invoice for service provided by him and paid the service tax on the taxable amount but later on the said invoice is rejected by the third party. Now assesee dont want to cancel the invoice but issue a fresh invoice but the service tax payable on that fresh invoice is less than the service tax payable on old invoice.
Now i want to know the process to adjustment of the said excess deposit the service tax.

PUNEET GOYAL

PUNEET GOYAL (Expert)
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15 December 2011 As per Rule 6(3) of Service Tax Rules, 1994 as amended after introduction of POT Rules, 2011
Where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason or where the amount of invoice is renegotiated due to deficient provision of service, or any terms contained in a contract, the assessee may take the credit of such excess service tax paid by him, if the assessee.-
(a) has refunded the payment or part thereof, so received for the service provided to the person from whom it was received; or
(b) has issued a credit note for the value of the service not so provided to the person to whom such an invoice had been issued.
Thus you can take the credit of excess service tax paid by satisfying either of above conditions i.e., refund or issue of crdit note.

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Satendra Tyagi

Satendra Tyagi (Querist)
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16 December 2011 In that case should the assesse has to intimate the service tax deptt for taking the credit of excess paid service tax which he want to claim with issuing the credit note?

PUNEET GOYAL

PUNEET GOYAL (Expert)
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16 December 2011 Intimation is required to be given to the range superintendence when u adjust excess amount under Rule 6(4) & (4A) of said rules. In your case u can adjust excess amount paid under Rule 6(3) therefore you need not to give intimation of the same.

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