Dr. Sanjiv Agarwal

Sanjiv Agarwal PhotoAccounting Codes for Services

Each service has been assigned a code (ECC code) for depositing the tax. Assessees are required to mention proper service code while tendering the payment to get proper and timely credit. Service tax assessees should quote new heads of accounts along with eight-digit serial code numbers as allotted by Controller General of Accounts, CBEC. The new eight-digit code numbers have to be used. With this, old account numbers have been withdrawn and need not be used. In case an assessee has mentioned wrong accounting code, he need not make another payment but the Department would sort out the matter with public accounts office. This was clarified vide Circular No. 58/07/2003-CX(ST) dated 20-5-2003.

In Commissioner of Excise & Service Tax v. Veena Industries Ltd. (2012) 34 STT 549 (Cestat, Ahmadabad), it was held that if service tax is paid under wrong service tax code, then adjustment of payment is allowed to be made in correct account code.

Accounting Code for Payment of Service Tax under Negative List Approach w.e.f. 1.7.2012

Vide Circular No. 161/12/2012-ST dated 6.7.2012, w.e.f. 1.7.2012, Service Tax shall be deposited under new accounting codes.

Accounting codes for the purpose of payment of service tax under the Negative List approach, with effect from 1st July, 2012 are as follows:

Name of Services Accounting codes
Tax collection Other Receipts Penalties Deduct refunds

 

All Taxable Services 00441089 00441090 00441093 00441094

Payment under Wrong Code

It has been clarified (Refer CST, Mumbai-I Trade Notice No. 21/2013-14/ST-1 dated 1.03.2014)

that when Service Tax is deposited in wrong accounting code or wrong Service Tax code, such mistakes can be rectified. Where Service Tax has been paid in wrong accounting code which may occur due to wrong data entry for accounting codes, it has been clarified that as long as these mistake have happened in the same Service Tax code (i.e., same registration number), assessee should inform the jurisdictional Commissionerate in writing alongwith copy of Service Tax payment challan. The Department shall report the matter to PAO who would carry-out necessary corrections and inform the Department and assessee of the action taken.

Where payment of Service Tax is made by mistake in somebody else’s Service Tax code, transfer from one Service Tax code to another Service Tax code is not possible. In such cases, following remedies are available:

(a)        As per Rule 6(4A) of the Service Tax Rules, 1994, Service Tax amount paid wrongly, can be adjusted against liability for succeeding month or quarter, as the case may be.

(b)        In case, facility at (a) cannot be availed, the assessee may file a refund application under Section 11B of the Central Excise Act, 1944 for the amount wrongly paid within the time limit prescribed under Law.

In Katrina R. Turcotte v. CST, Mumbai- I (2013) 31 STR 670 (Cestat, Ahmedabad), it was held that Service Tax liability discharged by the agent cannot be denied merely on the ground that Service Tax was deposited under wrong head.

In CCE & ST, Bhopal v. K.K. Kedia (2014) 35 STR 383 (Cestat, Delhi), where the assessee was a partner in a partnership firm engaged in providing management and repair services and the said partnership firm was dissolved and fresh registration was issued to the assessee as an individual, and service tax was wrongly deposited by the individual in wrong code belonging to the said partnership firm, it was held that the said amount was required to be adjusted in the assessee’s registered code.

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One response to “Payment of Service Tax – Use Correct Codes”

  1. nishith amin says:

    what is the time limit to claim refund if tax is paid under wrong asseess code.

  2. JAY says:

    IS PENALTY & INTEREST IN DELAY PAYMENT OF SERVICE TAX IS UNDER THE SAME CODE… FOR EXAMPLE…..FOR GTA 00440263
    >>>????
    PLEASE REPLY

  3. Ram says:

    Nice article.

    I agree with Shvetal Parikh on restoration of old accounting codes.

  4. samant says:

    Really a good article

  5. Sanjiv Agarwal says:

    Yes, I agree. For residual services, this will apply.

  6. Shvetal Parikh says:

    Circular No. 161/12/2012-ST dated 6.7.2012 has been modified vide Circular No. 165/16/2012-ST dated 20.11.2012 restoring old accounting codes for 120 taxable services. Accordingly, service tax should be paid under appropriate accounting codes as mentioned in Annexure to the Circular dated 20.11.2012.
    These are personal views.

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