As per the trade notice, the only method is to apply for a refund within the time limit (one year) and pay the tax under the correct service tax code with interest. In our humble view this is a very harsh method proposed by the trade notice.

Any assessee paying service tax is purely an honorary agent of the Government of India (CBEC). Once he collects the tax and pays the same, he should not be subjected to pay tax again only because of a technical issue with his service tax code. There are the following issues that need consideration and hence we are writing to you.

a) One assessee having two service tax codes – For example, one being a non-assessee and second being a regular assessee. Taxes are wrongly paid in the non-assessee code and returns are filed under the regular assessee code. The local commissionerate is of the view that the refund should be applied under the non-assessee code and tax should be paid again under the regular assessee code because there is no procedure to transfer the amount between the two codes. In our view the amount has reached the same bank account of the Service Tax Commissionerate. In this case, it is not prudent to ask the assessee to pay tax again.

b) Branches in the same jurisdiction, branches in different jurisdictions - – Here too in our view the amount has reached the same bank account of the Service Tax Commissionerate. In this case, it is not prudent ask the assessee to pay tax again.

c) Sister concerns/group – Here we may have to agree that it is not possible to follow the method because there are two separate entities and cannot be looked at as one group.

We hope some circular is issued quickly to help save the harsh treatment proposed by the above trade notice.