09-Jun-2022 Service Tax Refund claim beyond the limitation period

refund service-tax
Secretarial Services
Whitney leaning against a railing on a downtown street


A service company had filed applications for Refund of Excess Service Tax paid for FY 2016-17 and Q1 2017-18. The refund applications were filed beyond the time limit prescribed under the law. The original service tax returns filed by the company were not reflecting the correct positions as per Books of Accounts. The issue was how could the company claim the refunds?

The excess payment of service tax made was identified by the company after the due date of filing online revised service tax return.  Moreover the general time limit for filing of refund claims had also elapsed.  

The company submitted the revised service tax returns in Form ST-3 physically beyond the prescribed time limit reflecting the correct positions as per Books of Accounts before filing the refund applications. The Assessing Officer rejected the Refund Applications on account of delay in filing of revised service tax returns as well as delay in filing the refund applications on the ground that it was “time barred” i.e beyond the time limit prescribed under law.



An appeal was filed against the rejection order issued by the Assessing Officer. We had submitted strong reply against above rejection that the delay in filing of Revised ST-3 is only a procedural lapse and that the revised returns reflect the correct positions as per the Audited Books of Accounts. The excess payment of service tax was due to mistake of law wherein the service tax had inadvertently got paid on transactions which were not fructified and on transactions whose value had got reduced due to issuance of Credit Notes. Merely for this procedural lapse, the excess amount paid inadvertently cannot be retained by the government.

Section 11 B of the Central Excise Act which prescribes the time period of one year for filing a refund claim is inapplicable in the case of refund for service tax which was paid under mistake of law. 

We also submitted that time limit for filing appeal will not apply in case where company had paid service tax which was not payable during the relevant time. In other words, mere payment of amount would not make it a ‘service tax’ payable by the company & if any, amount is collected erroneously as representing service tax, which is not chargeable, there is no bar to return such amount and the provisions relating to refund of service tax, including those relating to unjust enrichment, cannot have any application to the return of the amount in question.

The above submissions during the appeal filed by the APMH representation team were accepted by Appellate Authority  and the Assessing officer was directed to consider the refund applications and after due verification of facts, refund to be  granted by the assessing officer.


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