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Excess service tax.
An assessee who has collected ST frm a client is unable to perform the service. briefly explain the situations in which and d the conditions subject to which he can adjust the ST relating to above, agnst his forthcoming service tax liability. It is a question frm practice manual. I have d answer but im not able to grasp it fully. What i understood is dat he can adjust it on pro rata basis. Is that all?? Can u plz tell me in sum simple language. Im getting confused here. Please help. :(
Replies (2)
The excess service tax can be adjusted as per Rule 6(4A) of STR, 1994 against the service tax liability of next months/quarters......there is nothing like that adjustment will be pro-rata basis.....it was eariler before 01.04.2012...
Suppose you raised an invoice with ST Rs. 1 lacs in Sep and paid the ST in Oct ...but in Oct end the deal get cancelled , in this case the excess tax Rs. 1 lacs which u have paid can be adjusted in next periods.....
But excess tax paid by wrong interpretation of law or by non-availment of Cenvat credit or by forgoing benefit of an abatement/exemption cannot be adjusted ....beacause Rule 6(4B) specifically restrict these cases ....
Thnx saurabh. That ws helpful.
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