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Hello Sir,

I have a franchisee of a medical company in India and get commission for business we give to them. We maintain a team as per company requirements. We started business in January 2015. I don’t have any other source of income.

My file is under service tax audit for the period of January 2015 till June 2017.

During the audit it was found that we had paid 28000 less service tax during the last quarter that is AMJ 2017 and 1, 20, 000 more service tax during April 2016 till March 2017.

On analyzing we realized two errors:

1. First error  happened because of different accounting standard  between us and my Franchisor and this resulted in my over declaring my turnover and hence paying double service tax in certain months  in Fy 2016 – 17. We did not Realize this until the audit period.

On explaining him this error he said that the turnover was declared by us only and how will we prove that turnover declared by us is wrong and that  we don’t have any other source of income.  He also said he will even ask income tax department to open my file for audit. I don’t have any other sources of income and all income I get is though cheque as official commission in only one bank account that I have in name of my proprietary firm.

2. Second error happened in AMJ 2017 which was last quarter for ST.  Here instead of paying ST we paid the amount in GST. Here also in FY 2017 –  18 we have paid over all more ST+ GST combined but less in heading of ST.

So over all out intentions were not to cheat on service tax / GST but due to oversight we have have ended up paying more tax.

Now department is saying that since we did not claim refund of excess ST of 1.2 lacs within one year we have lost our right to refund and we have it forget that amount  plus we have to pay penalties and interest on less ST which amounts to Rs 70000 odd.

Can we appeal against this and is it advisable? Do we need to go till tribunal for this?

Thanks and Regards

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