Excess Amount Collected to be deposited - Service Tax Practice Manual / Ready Reckoner - Service Tax

Excess Amount Collected to be deposited Earlier section 11D of the Central Excise Act, 1944 was extended to Service Tax. But, Finance Act, 2006 has inserted independent provisions to the service tax as section 73A and 73B to collect the excess amount collected by the person in excess of service tax and interest payable thereon. Service Tax Collected from any person to be deposited with Central Government - Section 73A Collection of any amount in excess of service tax assessed or determined Sub section (1) of section 73A provides that, Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. Collection of an amount representing service Sub section (2) of section 73A provides that Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. Recovery of amount not paid - issue of show cause notice Sub section (3) of section 73A provides that Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. Recovery of amount not paid - adjudication order Sub section (4) of section 73A provides that The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. Adjustment of amount paid under section Sub section (5) of section 73A provides that The amount paid to the credit of the Central Government under sub-section (1) or sub- section (2) or sub-section (4), shall be adjusted against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1). Disposal of surplus amount after adjustment under sub section (6) Sub section (6) of section 73A provides that Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Ac t and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount. Interest on amount collected in excess - Section 73B Interest payable Where an amount has been collected in excess of the tax assessed or determined and paid for any taxable service under this Chapter or the rules made there under from the recipient of such service, the person who is liable to pay such amount as determined under sub-section (4) of section 73A , shall, in addition to the amount, be liable to pay interest at such rate not below ten per cent. and not exceeding twenty-four per cent. per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first day of the month succeeding the month in which the amount ought to have been paid under this Chapter, but for the provisions contained in sub-section (4) of section 73A , till the date of payment of such amount: Explanation 1.- Where the amount determined under sub-section (4) of section 73A is reduced by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, the interest payable thereon under this section shall be on such reduced amount. Explanation 2.- Where the amount determined under sub-section (4) of section 73A is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, the interest payable thereon under this section shall be on such increased amount. Notification No. 15/2011 w.e.f. 1-4-2011 Department has fixed the rate of interest payable under section 73B as 18% per annum. No Interest / Lesser rate of interest where amount payable pursuant to sec. 37B Provided that in such cases where the amount becomes payable consequent to issue of an order, instruction or direction by the Board under section 37B of the Central Excise Act, 1944, and such amount payable is voluntarily paid in full, without reserving any right to appeal against such payment at any subsequent stage, within forty-five days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases, the interest shall be payable on the whole amount, including the amount already paid In the case of a service provider, whose value of taxable services provided in a financial year does not exceed sixty lakh rupees during any of the financial years covered by the notice issued under sub-section (3) of section 73A or during the last preceding financial year, as the case may be, such rate of interest shall be reduced by three per cent per annum.