Refund/Rebate of Service Tax

This query is : Resolved

suparna k s (Querist)
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21 April 2009 Hi Everybody.

One of our client is providing design services. the services are exported outside india. In India, it is providing service to only one recipient , the service tax on which is small amount.

1. The issue is prior to 2007, it was rendering call centre services which is exempt from payment of service tax as per notification no. 8/2003. The client was not aware of this and was paying service tax on the same. What can we do with respect to this?
Can we claim refund/ rebate of the service tax amount paid on call centre prior to 2007? OR can it be carried forward?

2. Currently, the company has got huge input credit every year and its carrying forward the input credit from several years. The service tax liability of the company is negligible around in 000s where as the input credit is in lakhs. Cant we claim refund/ rebate of this amount as the case may be?

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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21 April 2009 In frist case .. you can claim refund or adjust the same with your current liability.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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21 April 2009 Presumably the accumulation is due to export of taxable services. If so the options are:
1) Refund of accumulated credit under Rule 5 of CCR 2004 ( difficult)
2) Rebate on input services used in exported services ( cumbersome - most diffcult)
3Z) Rebate on ST paid on exported services ( appears tobe the best option) Here the ST is paid by utilising the accumulation.

As on date these refunds are taking time. Instead of it lying in your books you can make the claim with the department in this regards and let it go thru the process of Show cause notice, reply - PH- Order - Appeal etc.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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21 April 2009 In 2nd case i am not sure but "a claim for refund of any unadjusted input tax shall only be made and allowed in the twenty-fifth month after the quarter in which such claim for unadjusted input tax had arisen"

suparna k s

suparna k s (Querist)
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21 April 2009 Thanks Mr. Hiregange.

In the third option, You wanted to convey that, i will show in my returns that i have paid Service tax on export services by the way of utilising cenvat credit. Later, I can claim refund of ST paid on export services ?

suparna k s

suparna k s (Querist)
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21 April 2009 Thanks Mr. Prakash. But i think the second reply given by you is applicable to VAT and not for service tax. Service tax rules doesnot provide any provision as such

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