prpri There is no provision for adjustment for short payment of service tax of earlier period against excess payment of service tax in subsequent period There is no provision for adjustment for short payment of service tax of earlier period against excess payment of service tax in subsequent period

Case Law Details

Case Name : Lilason Breveries Ltd. Vs. CCE (CESTAT Delhi)
Appeal Number : STA No. 160 of 2009- SM
Date of Judgement/Order : 10/09/2009
Related Assessment Year :

RELEVANT PARAGRAPH

6. On plain reading of Sub-rule (1) of Rule 6 of the Rules, it is clear that service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the calendar month in which the payments are received, towards the value of taxable service. Sub-rule (3) of Rule 6 provides, that where an assessee paid excess service tax he may adjust the excess service tax so paid by him 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. It is clear that the adjustment of the excess service tax is permissible against the subsequent period and subject to fulfilment of the condition that if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. There is no provision for adjustment for short payment of tax earlier period against excess payment of tax in the subsequent period. Learned Chartered Accountant submits that the excess amount paid in the subsequent period may be treated as mere deposit which can be adjusted against the earlier short payment and it may be paid along with interest. I am unable to accept the contention of the learned Chartered Accountant. The assessee paid the service tax of excess amount against the taxable service which cannot be treated as mere deposit. Therefore, such adjustment is contrary to the provisions of Rule 6(3) of the Rules. Hence, demand of tax on this issue is justified.

NF

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0 Comments

  1. Ankit Singhal says:

    What if , the case is just opposite, that is , the person has excessively paid the service tax in some period ,can he adjust the same towards his tax liability for the next period.
    Are there any compliance for the same.

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