banner_ad

Service tax refund on bank guarantee

Queries 1682 views 3 replies

Dear Sir,

We have availed bank guarantee worth Rs.2 crores and paid Bank commission @ 2% which comes toRs.20 lakhs + service tax of Rs.40,000/-. so total paid Rs.20 laksh 40 thousand..

We requested to reduce commission 0.5% ,After 6 months, bank approved commission rate to 1.5% and refunded Rs.5 Lakhs. but did not refund service tax on refunded amount.

Question: Whether can bank should refund service tax when refunded principal amount.?

Please answer.

Replies (3)

I think bank cannot refund, because, after collecting ST, that portion will go to ST payable. Afterthan ST remittence will be done by regional/Zonal office of that bank. So bank cannot reverse the amount which is collected from you...

but you can take input tax credit for the same.

Dear Sir,

In this regard bank given you a credit not or statement for reason reduce the comm. and same service tax matter. If bank not same clarify that differential amount to be adjusted with further payment of service tax and excise but with bank approval i.e. statement or credit not you cannot adjust the same, otherwise facing the SCN in this regard. Hope you got same if not plz forward the same. 

Agreed with Gangatharam, as service tax collected in excess cannot be refund back on the ground that commission expenses were reduced.

once amount collected will be deposited in government treasury and you can claim input tax credit or that amount will be set off against any service tax payment liability.

Thanking you


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
19 May 2026
Accountant

ca kunjan

Mumbai

CA Inter

View Details
Company
21 May 2026
Associate

PWC

Kolkata

CA

View Details
Company
18 May 2026
MIS Executive

Primarc Pecan Retail Limited

Mumbai

B.Com

View Details
Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
ARTICLESHIP 15 May 2026
Audit Assistant / Article Trainee / Intern

SSGS and Associates

Chennai

CA Inter

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details