Doubly taxed service under Service Tax Act & GST Act. Also output of Service Tax on advance payment wrongly taken as input in TRAN 1.

[Vaibhav Bhala]

Respected Sir

We have received an advance in pre-GST regime for service tax and we duly paid service tax on it. The services were to be rendered after 01-07-2017 i.e. post-GST induction. As we were unaware of GST provisions at that time we charged GST at the actual time of supply of services and it was duly deposited with Government. Since it was doubly taxed we took credit of earlier service tax paid in TRAN-1.

But now we realized that as per Sec. 142(11)(b) of CGST Act, 2017, we were not supposed to charge GST on the supply of Services for which Service Tax was already deposited and service tax paid was our output liability and input of it cannot be availed in TRAN-1. Our intention was not to cheat the Revenue.

It is humble request to guide us how to correct this mistake.

AI Summary

Double Taxation Error Under Sec. 142(11)(b) of CGST Act: Misclaimed Input Credit Leads to Tax Demand and Possible Penalties A party received an advance payment before the GST regime and paid service tax on it. When services were rendered post-GST, they mistakenly charged GST again, resulting in double taxation. They attempted to rectify this by claiming the service tax as input credit in TRAN-1, which was incorrect under Sec. 142(11)(b) of the CGST Act, 2017. The Service Tax Department raised a demand for the wrongly claimed input. Suggestions included reversing the credit with interest, paying through DRC 03, and applying for a GST refund. Penalties and interest were noted as potential consequences.