As per Section 73A

Service tax collected has to be paid to the credit of the Central Government in the following cases

  • Person liable to pay service tax has collected service tax in excess of the service tax assessed or determined and paid on any taxable service or
  • Any person has collected the service tax which is not required to be collected [Sub-section (1) and (2)].



Procedure in case person does not pay such amount

  • Show cause notice shall be served by the Central Excise Officer, to such person
  • The notice will require such person 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
  • On receipt of such notice, person makes representation to Central Excise Officer
  • The Central Excise Office r shall consider the said representation and then determine the amount due from such person.
  • Such amount will however, not exceed the amount specified in the notice .
  • Thereupon, such person shall pay the amount so determined


Adjustment of Tax Paid

Such amount shall be adjusted against his service tax liability if any

Balance amount if any shall be

credited to the Consumer Welfare Fund,


refunded to the person who has borne the incidence of such amount

as per the provisions of section 11B of the Central Excise Act, 1944).



Procedure for Refund

Such refund is granted only if person makes application for refund within 6 months of date of public notice to be issued by Central Excise Officer for refund of excess amount.


Exam Questions

Question 9
Mr. Saravanan, a service provider, has collected a sum of ` 15,000 as service tax from a
client mistakenly, even though no service tax was chargeable on the service rendered by him.
Mr. Saravanan has not refunded such amount to the client. Should the amount so collected
be remitted to the credit of the Central Government? Explain.

View Answer

Question 12
Mr. Rajesh Singla is a service tax assessee. His service tax liability for the quarter
April - June was Rs. 35,000. However, on account of a clerical error, he paid Rs. 3,50,000 as
service tax for the said quarter. Now Mr. Rajesh Singla wants to adjust the excess payment of
Rs. 3,15,000 against his service tax liability for the succeeding quarter. Can he do so? What is
the condition to be satisfied for it?

View Answer
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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.