Refund of service tax

Queries 388 views 2 replies

Saikiran Reddy

Others

24 Points Joined July 2015

Dear All,

I have recently booked a bus ticket ( thro ebooking website like redbus etc.) and cancelled due to change of plans. They have charged 5.6% service tax while booking and they say service tax is non-refundble. My doubt here is "Is service tax refundable if we cancel particular service?" Terms and conditions of all such websites and even travels operators website has same condition. However, Indian railways chages service tax but they refund the same during cancellation. Can someone explain why there is difference in refund rules?

Replies (2)

CA Suri Kota

Assistant Manager @ EY

955 Points Joined November 2007

Service tax is refundable anytime as you cancelled but these companies wont pay u back. its the common practise wherein all of them stand together. They can always set off the service tax paid on cancelled transaction with any other transaction. Its jus a kind of fraud where in customers wont bother much on small amounts. Thanks, Suri

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

The service tax is payable to the extent of amounts retained when booking cancelled. The service provider can claim that services were not provided and therefore the deduction as a renegotiation.

Maybe to avoid the hassles from the ST dept, this practice is followed.