REFUND OR ADJUSTMENT OF SERVICE TAX ??

[abbas mukhi]

Dear Experts,

We have raised invoice to one party during the current year with service tax @ 12.36 and deposit the service tax on due basis.However we not received any amount from party.

Party was not agree with our claims and made court case.Now as per settlement we have waived off 50% of our dues and party remitted 50% amount with service tax @14.5%

We have already deposited 12.36 % Service Tax on our 100% dues

We received 50% of our dues @ 14.5%

How should we adjust/refund Service Tax...

Thanks....

AI Summary

Refund of service tax vs self-adjustment: refund avoids assessment risk where consideration and valuation are disputed.
Where a supplier deposited tax on an invoiced amount but later accepts reduced consideration, the choice is between claiming a refund of excess tax or taking an adjustment/credit against future liabilities; self-adjustment risks assessment, interest and penalty when excess payment arises from valuation or taxability disputes, whereas a refund claim-supported by contract, invoice, court order and settlement proof-is the safer route and subject to time limits and unjust enrichment rules.