Clarification - payment of tax to department without receiving

[govindaraju velugula]

one of client paid service tax with availing threshold exemption limit of Rs.10,00,000/- during the current financial year 2009-10. whether same has been adjusted in the future tax liability? The the service tax was paid to deptt. without claiming from service receiver Please clarify the if there is any steps to adjust in future payments.

[mukesh agrawal]

You have availed the exemption and paid tax on account of onward turnover. So where is error in payment of tax.

[ASHWIN GALA]

You can raise debit notes to the receiver for the service tax paid but not collected. Any amount received towards this debit notes will be adjusted against the amount paid by you.

AI Summary

Service tax paid without collection: issue debit notes to recover tax and adjust receipts against future liability. Where service tax has been paid to the department but not collected from recipients, the payer may issue debit notes to recover the tax component; any amounts received on such debit notes can be applied as an adjustment against future service tax liability or accounted for against tax already discharged, while payment to the department may reflect settlement of liability arising from onward taxable turnover notwithstanding a threshold exemption.