Payment of service tax in case client defaulted payment

navman (owner) (52 Points)

15 March 2012  

Hi,

We are filing service tax half yearly and making payment of service tax quarterly for all the service tax invoices raised in the quarter irrespective of whether we have collected the service tax from client or not. My question is, if a client defaults in making a payment on a invoice containing service tax (went out of business etc), then do we still have to pay the service tax to the govt.? My consultant says yes, but it seems ridiculous and hard to understand. Can somebody please clarify?