Refund of Service Tax

[Alok Nair]

I had been enrolled into GNIIT at NIIT Institute and is currently in process to obtain refund as the course was not completed.

I had paid approx 20k service tax as well and would like to know if there is any provision of refund of service tax in case a student opts out from an edu course as the services are not completely rendered.

[DR.MARIAPPAN GOVINDARAJAN]

You can claim from the Educational Institute if there is a clause in the agreement entered into between the educational Institute and you. You cannot claim refund directly from the Department.

[Alok Nair]

Hello Sir,

Thank you for writing in.

I have gone through all the documents and could not find any clause relating to the refund of service tax. Is it deemed that in absence of such clause I could not claim service tax from the institute.

Also, is it legally binding for the institute to refund the service tax in case they fail to render the promised services. Is there any forum where I could reach out to determine the party liable to refund the tax, i.e the department or the institute or do I have to bear the loss.

Appreciating your kind help.

[DR.MARIAPPAN GOVINDARAJAN]

In my view, if there is no specific provision for refund of fees with services tax in case of a student opt out or he is expelled, no refund could be claimed from the Institute. Even if you want to raise litigation, please see whether there is a clause as to the reference of dispute between you and the Institute.

[Ganeshan Kalyani]

Consider the litigation cost as well. It should not happens that fees exceeds your refund amount .

[Rajagopalan Ranganathan]

Sir,

Once the service tax is collected from you and paid to the Government, you institute cannot claim refund since the same will attract doctrine of unjust enrichment. However if the institute proves that it has already refunded the service tax to you along with the fees, then the institute may try to get the refund from the Department. But it is a cumbersome process. Therefore the institute will ask you to file the refund claim with the Department since ultimate consumer of excisable goods/services can claim the refund of duty/tax paid.

[Ganeshan Kalyani]

Getting refund from department takes time and cost of consultant .

[YAGAY andSUN]

Section 11B is applicable in this matter. either you or institute can apply for refund.

AI Summary

Service tax refund: entitlement depends on contract terms; consumer or institute may pursue statutory refund procedures. Refund of service tax for an educational course discontinued depends primarily on the contract between student and institute and on statutory refund procedures. If the agreement specifies a refund, the institute's contractual duty controls; absent such clause, institutes typically do not refund collected tax and litigation may be impractical. If the institute has refunded fees inclusive of tax, it may seek departmental recovery; alternatively, the consumer or the institute may apply for a departmental refund under the statutory refund mechanism, subject to procedural proof and the practical obstacle of unjust enrichment.