Refund
This query is : Resolved
07 February 2016
How can we claim refund of service tax deduct by railway department on freight????
07 February 2016
The query is not clear. Service tax is levied by the service provider, recovered from the service recipient (except in case or Reverse Charge Duties) and deposited to the credit of the Government. There is no question of deduction of Service Tax by any of the Service recipient. If the Railways have levied any service tax and the same has been paid, (I am not aware of any such practice) - transport of Goods by Rail is covered, then the claim for CENVAT credit can be made. If you are the service provider, I am not clear how Railways can deduct any service tax from your invoice, except to the extent in the Negative List. Please let us have more details, to enable a proper opinion.
20 July 2025
Regarding claiming refund of service tax deducted by the railway department on freight, here’s what you need to know:
Check Whether the Deduction Was Correct:
The Railways were supposed to deduct service tax on freight under the reverse charge mechanism on certain services. But if the service tax was wrongly deducted or excess deducted, you can claim a refund.
File a Refund Claim with the Department:
The refund claim must be filed with the Central Excise / Service Tax Department (now GST Department).
Use Form ST-3 or the applicable refund claim form under the service tax regime (pre-GST).
Attach documentary evidence, such as:
Copy of freight invoices
Proof of tax deducted by Railways
Contract / agreement showing freight terms
Any relevant correspondence
Follow Procedure under Section 11B of the Central Excise Act (for service tax):
Submit the refund claim within the stipulated time limit (generally within 1 year from the relevant date).
The refund is subject to scrutiny and approval by the department.
Appeal if Refund is Denied:
If refund is rejected, you can appeal to the Commissioner (Appeals) or the CESTAT.
Practical Steps:
Obtain TDS certificate (if issued) or deduction certificate from Railways.
Gather all relevant freight and tax documents.
Prepare and submit refund application with the Excise Commissionerate (Service Tax).
Track the status and follow up.
Check Whether the Deduction Was Correct:
The Railways were supposed to deduct service tax on freight under the reverse charge mechanism on certain services. But if the service tax was wrongly deducted or excess deducted, you can claim a refund.
File a Refund Claim with the Department:
The refund claim must be filed with the Central Excise / Service Tax Department (now GST Department).
Use Form ST-3 or the applicable refund claim form under the service tax regime (pre-GST).
Attach documentary evidence, such as:
Copy of freight invoices
Proof of tax deducted by Railways
Contract / agreement showing freight terms
Any relevant correspondence
Follow Procedure under Section 11B of the Central Excise Act (for service tax):
Submit the refund claim within the stipulated time limit (generally within 1 year from the relevant date).
The refund is subject to scrutiny and approval by the department.
Appeal if Refund is Denied:
If refund is rejected, you can appeal to the Commissioner (Appeals) or the CESTAT.
Practical Steps:
Obtain TDS certificate (if issued) or deduction certificate from Railways.
Gather all relevant freight and tax documents.
Prepare and submit refund application with the Excise Commissionerate (Service Tax).
Track the status and follow up.
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