Service Tax Refund

[Taju Sharma]

Can Assessee avail Service Tax Refund of Input Service (RCM) Challan paid during the Service Tax Audit on the basis of Audit finding. Please quote relevant case laws, if available. Thanks

[KASTURI SETHI]

It appears that you have paid Service Tax on verbal instruction from Audit team of the department. Now you feel that it was not payable. You can apply for refund of Service Tax under Section 11B of Central Excise Act as made applicable to Service Tax vide Section 83 of the Finance Act, 1994. At that time refund was to be applied for within one year from the date of payment. Deposit of Service Tax without any written communication from the department is without any authority of law. It is 'Deposit' and NOT 'Service Tax'.

Time limit of one year is not applicable if it is 'deposit'.

[KASTURI SETHI]

Pl. read deposit of 'Amount' and NOT 'Service Tax.

[KASTURI SETHI]

Under RCM, recipient of service is deemed service provider. So you have equal rights to claim refund. I mean to say you are at par with actual service provider regarding claiming refund of Service Tax paid in excess which was not required to paid by law.

[Taju Sharma]

Thanks Kasturi Sethi Sir, In our case, the assessee is engaged in the export of service. The assessee has paid RCM Challan on the import of service on the basis of the audit finding. Later on, the assessee has claimed input against those challans & apply for Service Tax Refund under rule 5 of the CCR, 2004. My query is that whether the assessee is eligible for taking a refund of RCM challan paid during the audit refund. If yes, please quote relevant case law or rule?

Thanks

AI Summary

Service tax refund: recipients under reverse charge may claim refunds for deposits paid without authority. Refunds for tax paid under the reverse charge mechanism can be sought under the Central Excise refund framework applied to service tax; payments made without legal authority during audit are deposits and may not be subject to the regular one year refund limitation. As recipient under reverse charge, the assessee has equivalent rights to claim refund or input credit where payments were not legally required, including claims under the refund rules applicable to service tax and related credit regulations.