REFUND OF SERVICE TAX

[DEEPAK SHARMA]

Dear Forum People,

One of the Readymade Garments manufacturer is not availing Cenvat Credit as per recent Budget. However the manufacturer is paying Service Tax to the Landlord on Rent of Factory premises. manufacturer also does not registered under Service Tax but registered with Central Excise. the RMG manufacturer want to refund the service tax amount which they are paying on rent amount to their landlord. please guide us.

Is it possible to them to refund the paid Service Tax amount ?

If yes, where the refund claim shall be filed, wether at Excise office or Service Tax off.

[Vijay kumar]

No. The amount of tax being paid to the landlord has to be paid by the landlord to the Government under the service 'Renting of immovable property'. Service tax is an indirect tax which has to be collected by the service provider (landlord) from the service receiver (RMG manufacturer) and is to be paid to the Government. This is no way related to the status of RMG manufacturer as a registrant under central excise and non-availment of cenvat credit.

AI Summary

Service tax on rent: liability rests with the service provider and the tenant cannot claim refund of amounts collected. The service tax on rent for renting of immovable property is an obligation of the service provider (landlord) to collect and remit; the rent-paying manufacturer cannot claim a refund of service tax paid to the landlord, and the manufacturer's central excise registration or non availment of cenvat credit does not alter that liability.