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Punjab Sales Tax on Services Act, 2012 QUESTION #2580
Question 1
Under section 16A(4), if the transferred payment amount is NOT deposited in the business bank account of the service provider, which party loses the right to claim input tax credit, adjustment, deduction, refund, repayment or zero-rating?
  • The service recipient
  • The service provider✔️
  • Both the service recipient and service provider
  • Neither party — the tax can be recovered from the bank
Correct Answer Explanation
Section 16A(4) provides that the amount transferred must be deposited in the BUSINESS BANK ACCOUNT of the service provider; otherwise THE SERVICE PROVIDER shall not be entitled to claim input tax credit, adjustment, deduction, refund, repayment or zero-rating. This is distinct from sub-section (3) which restricts the service recipient's rights.