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SERVICE TAX IF COLLECTED TO BE DEPOSITED

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 9-10-2015 - Section 73A was inserted in the Finance Act, 1994 by Finance Act, 2006 w.e.f. 18.04.2006. It provides that Service Tax collected from any person shall be deposited with the Central Government. Accordingly any person who has collected any amount in excess of Service Tax assessed or determined and paid on any taxable service from recipient of Service Tax in any manner as representing Service Tax, shall forthwith pay the amount so collect .....

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nt . Thus, if no amount of service tax is collected, section 73A is not applicable. Further, such amount should be in excess of service tax determined or assessed. Meaning of Forthwith The literal meaning of forthwith is immediately or without delay; as soon as reasonably can be, without unreasonable delay etc. Advanced Law Lexicon by P Ramanatha Aiyer provides the following interpretation / meaning of the word forthwith - The dictionary meaning of forthwith is immediately, at once, without dela .....

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of time, the expression forthwith must necessarily be understood to be immediate or instantaneous. so as to avoid any ambiguity or uncertainty. The right accrues or liability arises exactly as prescribed by the statute. [Raymond Synthetics Ltd. v. Union of India, 1992 (2) TMI 269 - SUPREME COURT OF INDIA]. It means with all reasonable quickness and reasonable prompt time. [Rao Mahmood Ahmed Khan v. Ranbir Singh. 1995 (2) TMI 359 - SUPREME COURT]. However, the word forthwith should not be constru .....

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soon as possible after the occurrence of some specific intervening event expressed or implied from the context. For example, the making of an application (Hancock v. Somes. 28 LJMC 196; Costa v. Hetherington. 28 LlMC 198) or the execution of a reconveyance (Boyes v. Bluck; 13 CB 652)]. (Stroud. 6th Edn. 2000) The word forthwith must receive a reasonable construction, and in giving it a construction some regard must be had to the nature of the act or thing to be performed and the circumstances o .....

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a Bhattageri, AIR 1976 Kant 3, 4. [C.P.c. (5 of 1908), O. XXI, R. 84(1)] Maxwell in Interpretation of Statutes (II th Edition) at p. 341 observes as follows:- When a statute requires that something shall be done forthwith , it should be probably understood as allowing a reasonable time for doing it. [Bidya Deb Barma etc. v. District Magistrate. Tripura, Agartala, 1968 (8) TMI 187 - Supreme Court of India at ) 325. - Preventive Detention Act (1950), S. 3(3)]. An Act which is to be done forthwith .....

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ervice tax from the service recipient or service tax has been collected which is not required to be so collected (ii) Such service tax has been collected in excess of service tax assessed or determined and paid (iii) Service tax having been collected has not been paid as provided in law. Under sub-section (3), if the amount collected is not paid as required under sub-sections (1) or (2), Central Excise Officer shall serve a show cause notice on the person liable to pay service tax seeking show c .....

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h person shall be adjusted as follows - (i) Against service tax payable by the person on finalization of assessment or any other proceeding for determination of service tax relating to taxable services. (ii) Surplus, if any after afore mentioned adjustment shall be dealt with (a) by way of credit to Consumer Welfare Fund under section 12C of Central Excise Act, 1944, or (b) refunded to person who had borne the incidence of such amount as per section 11B of Central Excise Act, 1944. For refund, a .....

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as cum tax; and where department argued that since assessee had admitted that amounts were cum-tax, such sum was payable by assessee u/s 73A, it was held that since Service Tax was paid under protest and invoices showed that assessee had not collected any Service Tax from his foreign clients, assessee was entitled for refund of entire Service Tax paid. Assessee s alternative plea to treat amount as cum-tax was valid only if services provided were held liable to Service Tax, which is not the cas .....

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excess of duty/tax assessed or determined and paid, has to pay such excess amount so collected to credit of Central Government. Expression duty/tax assessed or determined and paid presupposes determination or assessment of duty/ tax; only thereafter, question of excess collection would arise. In other words, assessment or determination is sine qua non to hold a person liable under section 73A. Even if there is no assessment order of any kind by proper officer, self assessment made by assessee w .....

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n this case, assessee had collected duty/tax to the extent actually payable and he had made self-assessment, therefore, such sum was payable under section 73 and section 73A was inapplicable, as there was no collection in excess of that self-assessed. In Neel Sidhi Enterprises v. CST, Mumbai - 2013 (8) TMI 674 - CESTAT MUMBAI, it was held that Section 73A envisages two things - amount is not required to be collected and amount is collected as representing service tax. In this case, DGST Circular .....

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t section 73A of the Act was introduced by Finance Act, 2006, with effect from 18.04.2006, to specify some situations where service tax is payable by a person, and to provide for recovery procedure in respect of such amount due. In terms of sub-section (1) of section 73A, any person who is liable to pay service tax and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service from the recipient of taxable service, shall forthwith pay the amount .....

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