REFUND

Now in general, assessee is regular in paying service tax and filing of return and he is quiet confident that there is no issue in service tax with department as whatever he is collecting as service tax, depositing the same to government account. Further there is no provision of scrutiny of return under service tax which makes him more confident that he is properly complying the law. However, still there are some area where assessee can be said to be in default which requires clarifications and amendments .One of the area is sub-rule (4A) and (4B)of rule 6 of the service tax rules.  

Whenever assessee pays excess service tax against due liability, he has two option i.e. either he can adjust the amount as per sub-rule 4(A) and sub-rule 4(B) of rule 6 of the service tax rules or he may file refund claim as per section 11B of the Central Excise Act, 1944 .In this article, we are discussing the provisions related to adjustment of excess service paid from subsequent liabilities which is making assessee in default only for some genuine adjustment.   Statutory provisions Sub-rules (4A) and (4B) of rule 6 of the Service Tax Rules, 1994 are applicable rules for adjustment of excess paid service tax. "(4A) Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be. (4B) The adjustment of excess amount paid, under sub-rule (4A), shall be subject to the following conditions, namely:-   (i)  excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification,  (ii)  excess amount paid by an assessee registered under sub-rule (2) of rule 4, on account of delayed receipt of details of payments towards taxable services may be adjusted without monetary limit, (iii)  in cases other than specified in clause (ii) above, the excess amount paid may be adjusted with a monetary limit of Rupees two lakh rupees for a relevant month or quarter, as the case may be,  (iv)  the details and reasons for such adjustment shall be intimated to the jurisdictional Superintendent of Central Excise within a period of fifteen days from the date of such adjustment." From perusal of above rules, it looks that for small adjustment there are number of conditions which are generally ignored by the assessee and which makes him in default.