We are a proprietership recruitment/manpower firm where we source candidates for companies and receive a payment for the same. Today I received call from one of my clients that under reverse charge mechanism they have paid excess of service tax to me and would be raising a debit note for the same. I spoke to my C.A he had failed to inform me about reverse charge and wasn't aware of it until today. It is surprising that none of the MNCs and large sized companies I'm working with has asked for it until today.
I checked the government notice today and the date of notice was 1st July 2012. As of today it has been more than one year since the notification, I filed income tax for FY 11-12 without reverse charge application and the MNCs I'm dealing with also paid me complete tax of 12.36%.
I have following questions. Would appreciate your responses as in case where we need to process the refund to the companies we are going to be in cash crunch and struggle.
- Can my customer ask me for refund of 75% of the amount for period 1st July 2012- 31st March since returns have already been filed and books for last year already closed?
- Can my customer ask for refund for 75% for this financial as I have already filed the half yearly service tax returns ?
- In case if refund from my end needs to be given can I ask for refund from government , if yes how much does it take to process the refund and the process to file for the same , under what heads.
- Can the ST for excess 75% be adjusted for future payments. If yes the process?
- If I need to refund 75% excess collected should the excess be calculated on 10.3% as rest is edu cess and higher sec cess?
- Is there any other way out.
Sorry for a long mail........................ please help ...........................
Regards
Rohit
CAclubindia
