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 tax credit adjustment allowed after refund or credit note, enabling offset against future liability.
Where a service provider refunds payment or issues a credit note because the service was not provided or was renegotiated due to deficiency, the provider may take credit for the excess service tax paid and adjust it against subsequent service tax liability; alternatively, the provider may claim a departmental refund supported by agreement, debit notes, and ledger evidence of repayment.