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Refund Claim In Service Tax
September, 30th 2015

The claim for refund may also arise due to rectification of mistake under Section 74, upon finalization of provisional assessment resulting in a refund under Rule 6(6) or excess payment of service tax by assessee entitling him to claim refund or under Rule 6(3) in case of self adjustment.

Form R of Central Excise Rules, 1944 is used for claiming refund under Rule 173 S of Central Excise Rules, 1944. It should be submitted to the Assistant or Deputy Commissioner of Central Excise, as the case may be. The assessee should prove that the incidence of duty has not been passed on to the buyer or any other person. This restriction of ‘unjust enrichment’ is applicable to Service Tax also. Assessees should comply with the following requirements -

(a) Claim for refund must be in prescribed Form-R of Central Excise Rules in duplicate.

(b) It should be signed and pre-receipted with a revenue stamp.

(c) It should be filed within the limitation period of one year from the date of payment of tax.

(d) Proof should be submitted that refund will not result in unjust enrichment.

(e) Appeal can be preferred against order denying the refund.

The refund claim should be backed by adequate documentary evidence(s) of payment of Service Tax, excess payment, refund due etc.

The claim should be filed along with all requisite papers and documents and if the same is incomplete, it may not be taken as filed properly. The refund can be granted only if then incidence of tax has not been passed on to any other person because being an indirect tax, it is assumed that the assessee who has paid the tax on a service has passed it on to the recipient of service. The onus of proof that the burden of tax was not passed to any other person lies on the claimant of such refund. All the refunds are issued by cheques are delivered to the claimant or his representative either personally against a proper acknowledgement or dispatched by registered post acknowledgement due.

Circumstances in which refund could be claimed

1. On finalization of provisional assessment [Rule 6(4) of Service Tax Rules, 1994]

2. On making excess payment of Service Tax

3. On rectification of mistake

4. On payment of Service Tax on advance receipts against which service is not provided later [Rule 6(3) of Service Tax Rules, 1994]

5. On payment of service tax under section 73A (surplus amount collected from customer and is refunded to customer after adjustment)

6. In case of exemption notification

7. Where manufacture or service provider is not in a position to utilise the credit on input or input service underCenvat Credit Rules, 2004 (Rule 5)

8. Refund of Cenvat Credit to service providers providing services taxed on reverse charge basis (Rule 5B of Cenvat Credit Rules, 2004)

9. Refund by merchant/manufacturer exporters (exemption by way of refund)

10. Under Export of Service Rules, 2005/Rule 6A of Service Tax Rules, 1994 w.e.f. 1-7-2012.

11. Refund of Service Tax to SEZ developers/units to SEZ.

Relevant date for computing limitation period of one year

Relevant date for ascertaining time limit of one year is as under –


Relevant date

Under normal circumstances

Date on which payment of Service Tax was made

In case of provisional assessment

Date on which adjustment of Service Tax after

final assessment was made i.e. date of final assessment

In case of person who is not service provider

Date on which taxable service was purchased

In case of rectification of mistake (exempting

a particular service)

Date on which exemption notification was issued

The “relevant date” for the purpose of refund as per section 11B of the Central Excise Act, 1944 which is applicable to Service Tax also, is the date payment of Service Tax. Thus, the limitation period of one year is to be calculated from the date of payment of the Service Tax.

Procedure for Claiming Refund

Any assessee, manufacturer/exporter, who is entitled for refund of any duty of excise due paid on account of excess paid, erroneously duty paid or double excise duty paid. The assessee can submit refund claim with prescribed form to their jurisdictional Deputy Commissioner / Assistant Commissioner of Central Excise with a copy to the Range officer of Central Excise. The assessee has an option to file refund claim electronically through ACES online and submit the hard copies along with necessary documents to the Department for verification. The claim is to be submitted in duplicate duly signed by the authorized person on behalf of the claimant and shall affix revenue stamp in space provided for pre-receipted in the application form.

The refund claim shall be submitted along with all requisite documents and proof of excise duty paid by the assessee and enclosing a disclaimer certificate about non-availment of Cenvat credit or any other benefits as buyer of the excisable goods. If the burden of duty has been passed on, the refund can be claimed by the person who actually paid the duty otherwise the amount is liable to be deposited in the Consumer Welfare Fund. The refund claim of less than ₹ 100 shall not be admissible in respect of all excisable goods

Assessee’s should note the following:-

(i) Application in the prescribed form (Form-R) should be filed in duplicate with the jurisdictional Asst./Deputy Commissioner of Central Excise/Service Tax.

(ii) The application should be filed within one year from the relevant date as prescribed in Section 11B of theCentral Excise Act, 1944 which has been made applicable to Service Tax refund matters also.

(iii) 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.

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