Q.1. Can any adjustment of tax liability be made by an assessee on his own, in cases when Service Tax has been paid in excess?
Ans: i. Yes. Where an assessee has paid Service Tax to the credit of the Government in respect of a taxable service, which is not so provided by him, either wholly or partially for any reason, the assessee may adjust the excess Service Tax so paid by him calculated on a pro-rata basis) against his Service Tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the Service Tax thereon to the person from whom it was received (Rule 6(3) of the STR, 1994).
ii. Further, assesses having centralised registration who paid excess amount of Service Tax, on account of non-receipt of details regarding the receipt of gross amount for the services at his other premises or offices, may adjust such excess amount against the Service Tax liability for the subsequent period and furnish the details of such adjustment to the Jurisdictional Superintendent of Central Excise/Service Tax within 15 days from the date of such adjustment (Rule 6(4A) of the STR, 1994).
iii. In all other cases of excess payment, refund claims have to be filed with the Department. The refund claims would be dealt as per the provisions of Section 11 B of the Central Excise Act, 1944, which is made applicable to Service Tax vide Section 83 of the Finance Act 1994.
iv. It is important to note that any amount of Service Tax paid in excess of the actual liability, is refundable, only if it is proved that the claimant of refund had already refunded such amount to the person from whom it was received or had not collected at all (Section 11 B of the Central Excise Act, 1944 which is applicable to Service Tax matters under Section 83 of the Act).
Q. 2 What is the procedure for claiming refund?
Ans: i. Application in the prescribed form (Form – R) is to be filed in triplicate with the jurisdictional Asst./Deputy Commissioner of Central Excise/Service Tax.
ii. The application should be filed within one year from the relevant date as prescribed in Section 11 B of the Central Excise Act, 1944 which has been made applicable to Service Tax refund matters also.
iii. Application should be accompanied by documentary evidence to the effect that the amount claimed as refund is the amount actually paid by him in excess of the Service Tax due and the incidence of such tax claimed as refund has not been passed on to any other person.
Q. 3. What is relevant date for calculation of limitation period in respect of filing refund claims relating to Service Tax?
Ans: The “relevant date” for the purpose of refund as per section 1 1B of the Central Excise Act, 1944 which is applicable to Service Tax also, is the date of payment of Service Tax. Thus, the limitation period of one year is to be calculated from the date of payment of the Service Tax.
Q. 4 Is there any provision for interest for delayed payment of refunds?
Ans: If any duty/tax ordered to be refunded under section 11 B(2) of Central Excise Act, 1944, to any applicant is not refunded within three months from the date of receipt of application, interest at the applicable rate shall be paid, subject to conditions laid down under section 11 BB of the Central Excise Act, 1944.
Also where an amount deposited by an appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal, under the first proviso to section 35F of the Central Excise Act, 1944, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority unless the operation of the order of appellate authority is stayed by a superior court or tribunal, interest shall be paid at the applicable rate after the expiry of three months, under the provisions made in section 35FF of the Central Excise Act, 1944.
Provisions of Sections 11 B, 11 BB, 35F and 35FF of the Central Excise Act, 1944 are made applicable to Service Tax vide section 83 of the Finance Act, 1994.