Adjustment of excess service tax paid

[sunil jain]

We have paid excess service tax for Aug,12 to Dec,12 (paid in Dec & Jan,13) on GTA service on reverse charge basis(as paid withou availing 75% abatement), now can we adjust this excess tax paid for our tax liability( on a/c of GTA & Security services) for the m/o Feb,12 under rule 6(4A) of Service tax rule 1994.

rule (4A) states that such excess amount may be adjuted against his service tax liability for the succeeding month.Hence kindly advise whether adjustment is possible in succeeding months.

Thanks,

CA. R.K. Aggarwal

[Hitesh Shah]

Mr. Aggarwalji,

In my understanding such excess payment is not on account of reason involving interpretation of valuation or law. Therefore you can very well adjust such excess payment against liability of succeeding month.

As regards adjustment of excess tax paid under GTA with liability of tax on security services, I am of the opinion that same can be done. I reach to this conclusion by relying on Circular 58/07/2003 - dated - 20-05-2003. Although the said circular does not exactly cover the given facts, but it does shows the intention of department to avoid collecting the  same tax in different names.

Third issue regarding Rule 6(4A), excess amount can be adjusted against liability of succeeding months. Had the intention of legislation been to restrict the adjustment to only succeeding month, then same would have bben expressly provided by way of words "Immediate Succeeding Month".

Do revert with your views on same.

Thanking You

CA Amit Hariya

[YAGAY andSUN]

Kindly refer para 2(b) of Notification No. 4/2008-ST dated 01-03-2008 in this regard for monetory limitation issue also:

para 2 (b) in sub-rule (4B), in clause (iii), for the words “rupees fifty thousand”, the words “on lakh rupees” shall be substituted.

 

AI Summary

Can Excess Service Tax Paid on GTA Service Be Adjusted Under Rule 6(4A) Against February 2012 Liability? A query was raised about adjusting excess service tax paid from August to December 2012 on GTA service under reverse charge without availing a 75% abatement. The question was whether this excess could be adjusted against the tax liability for February 2012 under Rule 6(4A) of the Service Tax Rules, 1994. A respondent affirmed that such an adjustment is permissible, as the excess payment was not due to valuation or legal interpretation issues. It was also suggested that the adjustment could apply to different services, supported by a circular indicating the department's intention to avoid double taxation. Another respondent referred to a notification regarding monetary limitations on adjustments.