Fps licensed utilised in service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2014
Dear Sir,

I have Focus product scheme / Focus Market Scheme license, can i utilised this license in paid of service tax.
If yes, plz clarify procedures and rules for the utilization in service tax.

Thanks & Regards
Roshan

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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19 August 2014 means u have paid service tax on license?

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Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2014 My question is
Can i use fps/fms license to pay service tax?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2024 No, you cannot use the Focus Product Scheme (FPS) or Focus Market Scheme (FMS) license to pay Service Tax directly. These schemes are designed to promote exports and do not provide for direct utilization in paying Service Tax liabilities.

Here’s a breakdown of why FPS/FMS cannot be used for paying Service Tax:

1. **Purpose of FPS/FMS**: The FPS and FMS licenses are issued under the Foreign Trade Policy of India to promote exports of specified products to specific markets. They provide benefits such as duty credit scrips that can be used to offset customs duties on imported goods or to pay certain taxes like Excise Duty. However, they are not intended for offsetting Service Tax liabilities.

2. **Nature of Service Tax**: Service Tax is a tax levied on services provided in India. It is governed by the Finance Act and is distinct from customs duties or other indirect taxes covered under schemes like FPS/FMS.

3. **Utilization Rules**: The utilization of FPS/FMS scrips is governed by the Directorate General of Foreign Trade (DGFT) guidelines and cannot be extended to pay Service Tax. Typically, these scrips are utilized through customs clearance procedures or transferred to others who can use them for their eligible purposes.

To pay Service Tax, you need to use funds from your business income or bank accounts, as per the rules laid out by the Central Board of Indirect Taxes and Customs (CBIC) under the Finance Act.

**Procedure for Service Tax Payment**:
- Calculate the Service Tax liability based on the services provided and the applicable tax rate.
- File Service Tax returns online through the ACES (Automation of Central Excise and Service Tax) portal.
- Pay the Service Tax liability electronically through internet banking or by using authorized bank challans.
- Maintain proper records of payment and file required documents as per Service Tax rules.

In conclusion, while FPS/FMS licenses are beneficial for customs duty purposes, they cannot be used for paying Service Tax liabilities. Service Tax payments must be made separately as per the regulations specified under the Finance Act and administered by CBIC.

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