Service tax to be returned

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This query is : Resolved

Aditi Kapoor (Querist)

16 February 2009 A vendor in his individual capacity collects service tax but fails to remit the same to the revenue because of not getting the ST registration done.After two months,he then wants to pay back the client this service tax money since he still does not have a service tax registration number.What are the repercussions?Meanwhile he has set up a Co which has ST registration.Can he transfer this billing to the new Co and remit the ST (with/without interest?)?

Rajesh Kumar

Rajesh Kumar (Expert)

17 February 2009 The amount collected as service tax has to be deposited with the exchequer.
The company can takeover the vendors business with all assets and liabilies. and deposit the tax onbehalf of vendor also.

Aditi Kapoor

Aditi Kapoor (Querist)

17 February 2009 So can the vendor deposit the service tax amount with the exchequer even if the vendor is not registered with service tax though his is a taxable service?Will it not be just easier if the vendor returns that amount via cheque/credit note to the client? Considering also that as an individual vendor his taxable turnover did not exceed Rs 10 lacs and he was nor required to register under service tax?

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)

17 February 2009 if the turnover does not exceed than better to return back the tax with a letter that same was wrongly collected

Aditi Kapoor

Aditi Kapoor (Querist)

18 February 2009 This is resolved

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