Demand of service tax already deposited

[Guest]

I am running security services and providing security services to one of PSU, and IAcharged services tax but PSU deduct it at their end and deposited in desired bank, and issued certificate of deposited, now service tax department demand us for depositing service tax which PSU has already been deposited, wheather it is genuine to pay double tax

[Madhukar N Hiregange]

The procedure followed is not correct. However the Tribunal may appreciate the argument that the tax has been paid albeit following the incorrect procedure. I remember some judgement ( recent ) in this reagrd which may come to your rescue.

[Guest]

In service tax there is no such provision (barring few exception) that a service receiver at his discretion pay service tax on behalf of service provider. However if such PSU has deposited service tax on TR-6 Challan mentioning the particulars of yours, you may find easy to get relief.

AI Summary

Service tax payment by recipient may credit provider when payer deposits with provider particulars, but general rule disfavors recipient discharge. A security-services provider faced a demand for service tax after the PSU client deducted and deposited the tax and issued a deposit certificate. Generally, a recipient's unilateral payment does not replace the provider's statutory obligation, but if the recipient deposited tax on the prescribed TR-6 challan while quoting the provider's particulars, the provider may obtain relief or credit against the duplicate demand.