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

Adjustment of excess service tax permissible against succeeding-month liabilities and across service categories under rule 6(4A). Excess service tax paid on GTA services under reverse charge may be adjusted under Rule 6(4A) against succeeding months' service tax liabilities, including liabilities on other services such as security services, provided the payment is not attributable to a valuation or legal dispute; departmental guidance supports avoiding double collection, and an amendment alters the monetary limit applicable to such adjustments.