Service tax recovery of pre registration period
This query is : Resolved
27 May 2015
Sir, Can we legally recover the amount of service tax of pre registration period in case we forgot to mention it separately in isssued invoice..
My client come into coverage of service tax from sep 2014, after crossing threesold limit of 10lac,
but it took service tax registration in mar2015 , and after it fillied service tax return of apr-sep 2014 and oct -mar 2015 period timely,
The question is here that the invoices we have already issued were without service tax amt,
as the amt of tax is very high my client want to recover it from the party...
but the party refuse to pay the amt of pre registration period and only accepted to pay the march month service tax amt
what is the scope of recovery of service tax from the party of ealier invoice..
is there is any scope for its recocery...
please suges..if anyone can???
My client come into coverage of service tax from sep 2014, after crossing threesold limit of 10lac,
but it took service tax registration in mar2015 , and after it fillied service tax return of apr-sep 2014 and oct -mar 2015 period timely,
The question is here that the invoices we have already issued were without service tax amt,
as the amt of tax is very high my client want to recover it from the party...
but the party refuse to pay the amt of pre registration period and only accepted to pay the march month service tax amt
what is the scope of recovery of service tax from the party of ealier invoice..
is there is any scope for its recocery...
please suges..if anyone can???
01 June 2015
Yes, you can recover the Service tax. You need to raise a debit note on the clients for the Service tax amount only. The debit note should mention the Service tax registration no. and in the particulars it should mention that the same pertains to recovery of Service tax.
Based on the debit note, even the client can claim CENVAT credit of the same.
Based on the debit note, even the client can claim CENVAT credit of the same.
24 September 2015
sir,my next query is whether input credit of invoice of november,2014 month can be taken in april,15,as six month time period expires in april,15...
24 July 2025
Let me address your two key queries separately:
---
### 1. **Recovery of Service Tax for Pre-Registration Period**
* Your client crossed the threshold in **September 2014** but got registered only in **March 2015**.
* Invoices issued before registration **did not mention service tax**, and now your client wants to recover that unpaid service tax amount from customers.
* **Legally, service tax liability arises from the date the service is provided and crosses the threshold**, regardless of registration date.
* **However, your client cannot charge or recover service tax from customers for the pre-registration period if the invoice did not show service tax separately**, because:
* Service tax must be clearly stated on the invoice as a separate component.
* If tax was not charged or shown earlier, customers are not legally obliged to pay it later.
* The customer’s refusal to pay the service tax for the pre-registration period is **valid**.
* Your client is still liable to pay service tax to the government for that period, **but recovery from the party is a separate commercial matter**.
* Best practice: issue a **supplementary tax invoice** if possible, but legally recovery is tough unless agreed.
---
### 2. **Input Credit of November 2014 Invoice Taken in April 2015**
* Service tax rules allow claiming input credit **within 6 months from the date of invoice**.
* Invoice dated November 2014 → 6 months expire in May 2015 (Nov + 6 months = May).
* If input credit is claimed in April 2015, it is **within the allowed 6-month period**, so input credit can be claimed legally.
* If credit is claimed after expiry of 6 months, it will be disallowed.
---
### **Summary**
| Query | Answer |
| ---------------------------------------------------------------------------------------------------- | ----------------------------------------------------- |
| Recovery of service tax from party for pre-registration period invoices without tax shown separately | Not legally enforceable; commercial negotiation only. |
| Input credit on Nov 2014 invoice claimed in April 2015 | Allowed, as within 6 months period. |
---
### **Advice**
* For recovery, it’s best to negotiate with clients or absorb the cost if possible.
* Ensure invoices clearly mention service tax going forward.
* Maintain timely registration to avoid such issues.
---
If you want, I can help draft communication to clients or prepare a note explaining input credit rules clearly for your team. Interested?
---
### 1. **Recovery of Service Tax for Pre-Registration Period**
* Your client crossed the threshold in **September 2014** but got registered only in **March 2015**.
* Invoices issued before registration **did not mention service tax**, and now your client wants to recover that unpaid service tax amount from customers.
* **Legally, service tax liability arises from the date the service is provided and crosses the threshold**, regardless of registration date.
* **However, your client cannot charge or recover service tax from customers for the pre-registration period if the invoice did not show service tax separately**, because:
* Service tax must be clearly stated on the invoice as a separate component.
* If tax was not charged or shown earlier, customers are not legally obliged to pay it later.
* The customer’s refusal to pay the service tax for the pre-registration period is **valid**.
* Your client is still liable to pay service tax to the government for that period, **but recovery from the party is a separate commercial matter**.
* Best practice: issue a **supplementary tax invoice** if possible, but legally recovery is tough unless agreed.
---
### 2. **Input Credit of November 2014 Invoice Taken in April 2015**
* Service tax rules allow claiming input credit **within 6 months from the date of invoice**.
* Invoice dated November 2014 → 6 months expire in May 2015 (Nov + 6 months = May).
* If input credit is claimed in April 2015, it is **within the allowed 6-month period**, so input credit can be claimed legally.
* If credit is claimed after expiry of 6 months, it will be disallowed.
---
### **Summary**
| Query | Answer |
| ---------------------------------------------------------------------------------------------------- | ----------------------------------------------------- |
| Recovery of service tax from party for pre-registration period invoices without tax shown separately | Not legally enforceable; commercial negotiation only. |
| Input credit on Nov 2014 invoice claimed in April 2015 | Allowed, as within 6 months period. |
---
### **Advice**
* For recovery, it’s best to negotiate with clients or absorb the cost if possible.
* Ensure invoices clearly mention service tax going forward.
* Maintain timely registration to avoid such issues.
---
If you want, I can help draft communication to clients or prepare a note explaining input credit rules clearly for your team. Interested?
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