Service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2015 Dear Sir/Mad'm

Please clarify whether Payment of Service tax in same challan can be allocated to Interest or we need to specify in the Challan seperately as pertaining to Interest on Service Tax?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 April 2015 You need to specify in challan by selecting the code for payment of interest.

Querist : Anonymous

Querist : Anonymous (Querist)

13 April 2015 Thank You Sir.
If in Service tax Challan, Code has been indicated wrongly, then can we adjust it to Interest Component?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 Great follow-up question!

✅ Short Answer:
Yes, if the payment was made under the wrong accounting code (e.g., Service Tax instead of Interest), it can be adjusted, but not automatically — you’ll need to request it from the department.

🔍 Details:
Under the Service Tax regime (pre-GST), challans had Accounting Codes for:

Service Tax

Education Cess

Secondary & Higher Education Cess

Interest

Penalty, etc.

If you made a payment under the wrong head (e.g., used Service Tax code instead of Interest), it won’t be auto-adjusted.

🛠️ Remedy / Action:
Write to your Jurisdictional Service Tax Officer (Range Superintendent).

Submit a request on your company letterhead mentioning:

The challan details (GAR 7)

The incorrect code used

The correct component (Interest/Penalty) to which it should be applied

A request for rectification/appropriation under proper head.

Attach:

Copy of the challan

Copy of relevant ST-3 return (if filed)

Payment proof and calculation of interest

🧾 Supporting Provision:
As per CBEC guidance (pre-GST), such adjustments can be made manually upon written request — especially where payment is already made to government credit but tagged under wrong code.

⚠️ Note:
Until it is officially corrected in department records, interest liability may still show as unpaid. So, it's important to request and retain acknowledgment of your correction application.

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