Service tax liability adjustment

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This query is : Resolved

DIVYESH JAIN (Querist)

08 April 2016 Dear Sir,

One of my client has calculated wrong Service Tax for F.Y. 2014-15 resulting into a liability of Rs. 50,000.

Now, in F.Y. 2015-16 the client has paid excess Service Tax resulting into a Refund of Rs. 40,000.

Can he adjust this refund against previous Outstanding demand. If not, how will he able to pay that liability

Service Tax Returns of F.Y. 2014-15 are already filed.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

08 April 2016 You can inform the Range Superintendent about the payment being made by the challan for F.Y.2015-16. The Service Tax Challan has no period mentioned, so it can be used for any payment and adjusted against the same. However, the interest for late payment too has to be made, if necessary by a separate challan and the same too should be intimated to the Range superintendent.

Claiming refund after paying the outstanding dues is also an option - but the application for refund should be made within one year of the payment and it is very, very difficult / almost impossible to get a refund from the Central Excise / Service Tax Department.

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DIVYESH JAIN

DIVYESH JAIN (Querist)

08 April 2016 But how will I revise the Service tax return for F.Y. 2014-15 for which now the client has realised he has made short payment

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

08 April 2016 There is no way it can be revised. Has your client shown a lower Turnover than in the accounts or was the correct turnover shown and a mistake in tax calculation.

DIVYESH JAIN

DIVYESH JAIN (Querist)

08 April 2016 Turnover is shown less in the service tax return in F.Y. 2014-15, as we cannot revise the return now, what is the remedy

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

14 April 2016 The tax on the short reported Turnover be adjusted from payment of FY 2015-16. Pay the interest for the delayed period and intimate the Range Superintendent of the mistake and rectification by a duly recipted letter.

DIVYESH JAIN

DIVYESH JAIN (Querist)

14 April 2016 Thanks a lot Sir. One more thing I wanted to know i.e. for late filing of Service Tax Return in the Form ST-3 what period I must select to pay Late fee. eg: Apr-Jun or Jul-Sep

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

15 April 2016 The latest quarter or month i.e September for the return due on October 25th and March for return due on April 25th.

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