REFUND OR ADJUSTMENT OF SERVICE TAX

In case where Assessee has made excess payment of service Tax to the account of Central Government then there are two options are available to Assessee :-

           I.   Self-Adjustment against their Future ST liability  [Rule 6(4A), 6(1A),  6(4B) of S T Rule,1994 ]

        II.   Claiming Refund (Only if Self-Adjustment is not possible) [Section 83 of FA, 1994 read with section 11B & 11BB of Central Excise Act,1944]

Self-Adjustment of excess payment of Service Tax       

According to Rule 6(4A), Service Tax Rules, 1994 where a person has paid any amount in excess of the amount required to be paid towards Service Tax liability for a month or quarter, he may adjust such excess amount paid by him against his Service Tax liability for the succeeding month or quarter. The adjustment is limited to the liability of Service Tax in the subsequent month or quarter.

According to Rule 6(4B), Self-adjustment is permissible if :

• Excess Service Tax paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification

•  Excess Service Tax amount paid by an assessee having Centralized Registration on account of delayed receipt of details of payments towards Taxable services may be adjusted without monetary limit.

• For assessee other than Centrally registered, specified in (ii) above, the excess amount of Service Tax paid may be adjusted with a monetary limit of Rs. 2,00,000/- (Two lakh) for a relevant month or quarter.

• The details and reasons for such adjustment shall be intimated to the jurisdictional Superintendent of Central Excise within a period of 15(fifteen) days from the date of such adjustment.

Claiming refund of Service Tax

Refund of Service Tax paid would be dealt with as per the provisions of Section 11B of the Central Excise Act, 1944, which is applicable to Service Tax vide Section 83 of the Finance Act 1994. However, the refund will be granted only if it is proved that the claimant of refund has already refunded such amount to the person from whom it was received or had not at all collected the amount. 

Procedure to claim Refund

• Application has to be made in the prescribed form (Form – R).

• Application has to be filed in triplicate with the jurisdictional Assistant/Deputy Commissioner of Central Excise/Service Tax.

• Application should be accompanied by such documentary or other evidence as the Applicant may furnish to establish that the amount of tax or interest, in relation to which such refund is claimed was collected from, or paid by, him and incidence of such tax claimed as refund has not been passed on by him to any other person.

• The application should be filed within 1 year from the relevant date i.e., from the date of payment of the Service Tax.

• If assessee has paid service tax which was not payable at all, then time limit does not apply to amount which is not “service tax” at all.

If amount of service tax is not refunded within three months from the date of receipt of refund application, interest @ 6% p.a. (5% to 30%) shall also be paid from the date immediately after the expiry of said 3 months till the date of refund of such Service Tax.

How to create Online Service Tax Refund Application

1. Login to Service tax Deptt. site  https://www.aces.gov.in/STASE/switch.do?prefix=/ui/jsp/common&page=/loginpage.do (Shown in picture below) 

2. Create Refund Request : Click on REF >> Refund Request >> Create (Shown in picture below)

3. Following Screen will appear

Fill the all required details as shown/asked in above picture and click on Submit Button

4. On successful submission Service Tax Refund Request Application with reference will be generated.

5. Take Print out and submit Hard-copy to Service Tax Department with all required documets as discussed above.


Download/View

Click here to download the list of documents required to be filed with Refund Application