Inactive status

Queries 553 views 4 replies

Pratap Seth

CFO

30 Points Posted on 10 July 2015

Last year one of our vendor sent a bill along with service tax amount and we verified that the assessee status in Assessee Master provided by CBEC as "inactive" status. We asked them about their status and they informed us for releasing their payment without service tax amount because some problem with the tax department. We paid them in full after tds and closed our accounts for the year.

After 9-10 months suddenly they are asking for the payment of tax amount, which we have denied; because we can not avail the credit of those tax and cheked further that their acccount status is still showing as 'inactive. Please guide what to do, because we obeserved they are not depositing any tax to the govt but collecting wrongly.

Thanks & regards

Replies (4)

JAGANATHAN R ACMA, SAP(Fi-Co)

Manager Accounts and Finance

916 Points Posted on 31 July 2015

as per the act u have to pay tax either to customer or government., while release the payment

Pratap Seth

CFO

30 Points Posted on 16 September 2015

Agreed. But if we are not availing any cenvat credit against the same invoice, then we are definitely paying to the Govt. account directly.

Niraj Kumar Sinha

Sr. Officer SPSIL

648 Points Posted on 16 September 2015

If the provided service comes under RCM or partly RCM, then you have to pay your share of service tax to the Service Tax Depertment (GOI). Leave his share of service tax. That will be paid by him. You are not responsible for that.

Madhukar N Hiregange

Chartered Accountant

39039 Points Posted on 17 September 2015

If you know he is not paying the ST- do not pay the ST to him and ask him to provide proof of payment and active status then you would reimburse him.

However large cos who have 100s of vendors cannot keep track and would be justified in paying the service provider and the headache of whether he has paid on not to govt is with the provider. Receiver is eleigible for credit even if provider has not paid.

When dept demands from provider they will collect the tax + interest + penalty.

Position confirmed by several judical decisions.