Advance Payment of Service Tax versus Excess Payment of Service Tax - Service Tax Practice Manual / Ready Reckoner - Service Tax

Advance Payment of Service Tax versus Excess Payment of Service Tax Provisional Payment of Service Tax Rule 6(4) of Service Tax Rules, 1994 Where an assessee, for any reason, unable to correctly estimate his service tax liability for any particular month or quarter, he may make a request in writing to the Assistant/Deputy Commissioner of Central Excise. He needs to give reason for payment of service tax on provisional basis. On receipt of such request, authority may allow payment of service tax on provisional basis. ================= Advance Payment of Service Tax Rule 6(1A) of Service Tax Rules, 1994 Any person voluntarily chooses to pay advance service tax. After making advance payment, he has to intimate the superintendent of Central Excise within a period of fifteen days from the date of such payment Also he will indicate the details of advance payment and its adjustment, if any in the subsequent return filed. There is no upper limit for advance payment of service tax for any assesse. ================= Excess Payment of Service Tax Rule 6(4A) read with rule 6(4B) of Service Tax Rules, 1994 Where an assessee has paid service tax in excess, he is allowed to adjust such excess payment for the liability of succeeding month or quarter. Before 1.4.2012, after adjusting the excess payment, intimation was required to be submitted with the superintendent. This condition has been removed. Further, before 1.4.2012 certain limits have been prescribed in Rule 6(4B) , but after 1.4.2012 such limits have been removed and now excess amount paid is allowed to be adjusted without any limit. The condition for adjustment of excess amount is that the excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification. ================= It may be noted there is significant difference between advance payment under rule 6(1A) and excess payment under rule 6(4A) and 6(4B) and therefore, assessee is required to understand the difference between these two carefully.