When Refund of Service Tax can be claimed

If service tax is paid in excess of the actual liability, assessee is required to claim refund of excess amount of service tax paid. He cannot adjust excess tax paid against subsequent payment of tax.

Moreover, excess service tax paid is refundable, only if it is proved that the claimant of refund had already refunded such amount to the person from whom it was received or had not collected at all from any one.

Exception to Self Adjustment

Self-adjustment of service tax is permissible if service tax has been paid in advance under rule 6 (1A) and 6(4A) of Service tax Rules

Procedure to claim refund

• Application has to be made in the prescribed form (Form – R).
• Application has to be filed in triplicate with the jurisdictional Assistant/Deputy Commissioner of Central Excise/Service Tax.
• Application should be accompanied by documentary evidence to the effect that the amount claimed as refund is the amount actually paid by him in excess of the Service Tax due and the incidence of such tax claimed as refund has not been passed on to any other person.

Time Limit

The application should be filed within 1 year from the relevant date i.e., from the date of payment of the Service Tax.

Interest for delayed payment of refunds

If amount of service tax is not refunded within three months from the date of receipt of refund application, interest at the applicable rate shall be paid by the Government, subject to certain conditions.

No Refund without claim

The refund will not be automatic even if order granting refund is passed. Specific application for refund is necessary within time limit prescribed.

No time limit in case amount paid is not tax

If assessee has paid service tax which was not payable at all, then time limit does not apply to amount which is not “service tax” at all.

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