Service tax collected from the recipient of service must be paid to the Central Government [Section 73A]:

Section 73A covers the amounts collected by any person in the guise of service tax. At times tax payers who are unsure of tax liability collect the service tax, but do not remit the amount so collected. In such a case, they would be charged with both interest and penalty. Therefore, even if one is not sure whether tax is payable or not, the same should be remitted to the revenue authorities. The provisions of section 73A are:

(1) Service tax collected to be deposited with the Central Government: Service tax collected has to be paid to the credit of the Central Government in the following cases —

(a) 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

(b) Any person has collected the service tax which is not required to be collected [Subsection (1) and (2)].

(2) Notice to be served in case the service tax not so deposited with the Central Government: If any person, who is liable to pay any of the above mentioned amounts, does not pay such amount to the credit of the Central Government, a notice shall be served on him by the Central Excise Officer. 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 [Sub-section (3)].

Such person may make a representation to the Central Excise Officer after receiving the notice. The Central Excise Officer 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 [Sub-section (4)].

(3) Adjustment of amount paid to the credit of the Central Government against the service tax payable [Sub-sections (5) & (6)]: Such amounts paid shall be adjusted against the service tax payable by the person on finalization of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1).

Surplus amount: Where any surplus amount is left after the adjustment, such amount shall be:-

(i) credited to the Consumer Welfare Fund, or

(ii) refunded to the person who has borne the incidence of such amount (in accordance with the provisions of section 11B of the Central Excise Act, 1944).

Time-limit for filing refund claim: Such person may make an application within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount.