Service tax input (if service provider refund amount)

This query is : Resolved

Jatin (Querist)
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17 March 2016 Dear Experts,

Please help me on following issues:

1. Franchisee fees Rs. 11400 paid to Franchisor in respect of Coaching classes of Banking exams
Franchisee Fees : 10000
S.T. 1400
2. Our firm not availed & utilize service tax because we have not provide any services
3. Due to some reasons Franchisor cancel agreement & amount refund to us Rs 10000
service tax amount not refund
4. Can I claim Service Tax Rs. 1400 or not

Thanks & Regards,
Jatin

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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18 March 2016 Refund of Service Tax is available only to the registered assessees. Since you are not a registered assessee, the refund has to be claimed only by the service provider. You should write to the Service Tax Department stating your case and requesting them not to refund the tax paid to the franchisor. Further follow up with the franchisor, for refund of service tax, if he has not provided the service as is apparent from his refunding the fees. Also inform him that in case the service tax is not refunded, you will have no option but to inform the Service Tax Department, (It appears that the Franchisor has either not deposited the Service Tax - you are not the only cancellation amongst his franchisees - or if deposited he has made application for refund. In case, he has done so, he will refund the service tax forthwith - and in case he does not issue a lawyer's notice with cc to the Department.

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