Service tax query

[Jitender Sharma]

Dear Sir,

Please guide me regarding the query. We will receive payment from the service receiver for the invoice raised by us say for e.g. Rs 10,000 including service tax i.e; Rs 8,900 for Service and Rs 1,100/- as Service tax. Now if customer not satisfied with our service upto 3 month then we are offering 100 percent refund which means we have to return Rs.10,000/- to Service receiver.

But by doing so, we will face loss of Rs. 1,100/- (Service Tax) which is already paid. How can we save ourself from the Loss. Can it be adjusted as modvat against the new invoice or not

Please suggest if anything possible

Dear Sir, Please guide me regarding the query. We will receive payment from the service receiver for the invoice raised by us say for e.g. Rs 10,000 including service tax i.e; Rs 8,900 for Service and Rs 1,100/- as Service tax. Now if customer not satisfied with our service upto 3 month then we are offering 100 percent refund which means we have to return Rs.10,000/- to Service receiver. But by doing so, we will face loss of Rs. 1,100/- (Service Tax) which is already paid. How can we save ourself from the Loss. Can it be adjusted as modvat against the new invoice or not Please suggest if anything possible

Read more at: http://www.caclubindia.com/forum/details.asp?mod_id=291618&offset=0#.U3M0cHbzeEM

Dear Sir, Please guide me regarding the query. We will receive payment from the service receiver for the invoice raised by us say for e.g. Rs 10,000 including service tax i.e; Rs 8,900 for Service and Rs 1,100/- as Service tax. Now if customer not satisfied with our service upto 3 month then we are offering 100 percent refund which means we have to return Rs.10,000/- to Service receiver. But by doing so, we will face loss of Rs. 1,100/- (Service Tax) which is already paid. How can we save ourself from the Loss. Can it be adjusted as modvat against the new invoice or not Please suggest if anything possible

Read more at: http://www.caclubindia.com/forum/details.asp?mod_id=291618&offset=0#.U3M0cHbzeEM

AI Summary

Service Provider Can Claim Service Tax Refund or Credit Note for Full Refunds Under Service Tax Rule 6(3). A service provider raised a query about handling service tax when offering a full refund to dissatisfied customers. The provider is concerned about losing the Rs. 1,100 service tax already paid on a Rs. 10,000 invoice. Respondents suggested that under Service Tax Rule 6(3), the provider could either claim a refund from the tax department or issue a credit note, allowing the adjustment of excess service tax against future liabilities. The rule allows for credit or refund if the service was not provided, or the invoice amount was renegotiated due to service deficiencies.