service tax refund

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krishna rao

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24 October 2008 pl give suggition of service tax refund rule

Aisha

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27 October 2008 like?

Ram Avtar Singh

Ram Avtar Singh (Expert)
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09 November 2008 GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

New Delhi, the 17th September, 2007.

Notification No.40/2007-Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services specified in the Schedule (hereinafter referred to as specified services) received by an exporter and used for export of goods (hereinafter referred to as said goods), from the whole of the service tax leviable thereon under section 66 of the said Finance Act, subject to the following conditions, namely:-

(a) the exemption shall be claimed by the exporter of the goods for the specified services received and used by the exporter for export of the said goods;

(b) the exemption claimed by the exporter shall be provided by way of refund of service tax paid on the specified services used for export of the said goods;

(c) the exporter claiming the exemption has actually paid the service tax on the specified services;

(d) the exemption or refund of service tax paid on the specified services used for export of said goods shall not be claimed except under this notification.

2. The exemption contained in this notification shall be given effect to in the following manner, namely:-

(a) the person liable to pay service tax under sub-section (1) or sub-section (2) of section 68 of the said Finance Act shall pay service tax as applicable on the specified services provided to the exporter and used for export of the said goods, and such person shall not be eligible to claim exemption for the specified services:

Provided that where the exporter of the said goods and the person liable to pay service tax under sub-section (2) of section 68 for the said services are the same person, then in such cases exemption for the specified services shall be claimed by that person;

(b) the exporter shall claim the exemption by filing a claim for refund of service tax paid on specified services:

Provided that,-

(i) the manufacturer-exporter of the said goods shall file the claim for refund to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture or warehouse, and

(ii) the exporter, other than a manufacturer-exporter, shall file the claim for refund to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the registered office of such exporter,

(c) the claim for refund shall be filed on a quarterly basis, within sixty days from the end of the relevant quarter during which the said goods have been exported:

Provided that the said goods shall be deemed to be exported on the date on which the proper officer of Customs makes an order permitting clearance and loading of the said goods for exportation under section 51 of the Customs Act, 1962 (52 of 1962);

(d) the refund claim shall be accompanied by documents evidencing,-

(i) export of the said goods;

(ii) payment of service tax on the specified services for which claim for refund of service tax paid is filed;

(e) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall, after satisfying himself that the said services have been actually used for export of said goods, refund the service tax paid on the specified services used for export of said goods:

Provided that where any refund of service tax paid on specified services used for export of said goods has been paid to an exporter but the sale proceeds in respect of the said goods have not been realised by or on behalf of the exporter in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), including any extension of such period, such service tax refunded shall be recoverable under the provisions of the said Finance Act and the rules made thereunder, as if it is a recovery of service tax erroneously refunded.

Schedule

Sr. No.
Taxable Services

Classification under Finance Act, 1994
Description

(1)
(2)
(3)

1.
Section 65(105)(zn)
Services provided for export of said goods

2.
Section 65(105)(zzl)
Services provided for export of said goods

3.
Section 65(105)(zzp)
Services provided for transport of said goods from the inland container depot to the port of export

4.
Section 65(105)(zzzp)
Services provided for transport of said goods from the inland container depot to the port of export

[F.No.341/15/2007-TRU]

(G.G. Pai)

Under Secretary to the Government of India

--------------------------------------------------------------------------------

PRESS NOTE

Government has issued Notification No. 40/2007-ST dated 17.09.2007 providing refund of service tax paid by exporters on the following four taxable services, which are not in the nature of “input services” but could be linked to export goods.

(i) Port Services provided for export. (Section 65[105][zn] of the Finance Act, 1994)

(ii) Other port Services provide for export. (Section 65[105][zzl])

(iii) Services of transport of goods by road from ICD to port of export provided by Goods Transport Agency. (Section 65[105][zzp])

(iv) Services of transport of export goods in containers by rail from ICD to port of export. (Section 65[105][zzzp])

2. Service tax paid by exporters on input services used for export goods is refunded under the existing schemes. Drawback scheme also factored service tax paid on input services used for export goods.

3. The issue of extending refund of service tax paid on taxable services, which are not “input service” but could be attributable to export goods was examined. Unlike goods, Services are intangible in nature. Hence, post audit verification to establish linkage of use of service with export requires a simple and verifiable method. Government held discussion with the stake-holders and identified the above mentioned taxable services for which refund could be provided wherever use of the said taxable services could be linked to exports.

4. The said notification is available on the CBEC website www.cbec.gov.in. For details, the notification may be referred to

Guest

Guest (Expert)

29 January 2009 A. Certain conditions for refund of service tax by exporter of goods under

Notification No 41/2007 ST Dt. 6th October, 2007 relaxed vide Notification No.

33/2008 ST dt 7th December, 2008.

• Earlier refund of service tax on specified services was available to exporter, only if he had

exported the goods without availing the duty drawback of service tax. Now this condition

has been omitted.

• Refund of service tax under Business Auxiliary Service was restricted to lesser of the

Following

o actual amount of service tax paid or

o service tax calculated on 2% of FOB value of export goods

Now this limit has been increased to 10% of FOB value of export goods

• Refund of Clearing and Forwarding services used in relation to export of goods are also

eligible for refund provided invoice issued by clearing and forwarding agent contains

following additional detail

o number and date of shipping bill,

o description of export goods,

o number and date of the invoice issued by the exporter relating to export goods,

o details of all the charges, whether or not reimbursable, collected by the clearing and

forwarding agent from the exporter in relation to export goods.

B. Clarifications vide circular No. 106/9/2008 ST dt. 11th December, 2008 in

respect of refund claimed by exporter in Notification No. 41/2007 (supra):

• It has been clarified that invoice of the input service provider shall contain all the details as

given in Rule 4A of the service tax Rules, 1994. Refund claim cannot be allowed on the

basis of invoices not having complete details. In view of the above clarification it is in the

interest of the exporter to verify the invoice of the input service provider before releasing

payment and ensure that it shall contain following details.

o The name, address and the registration number of such person;

o The name and address of the person receiving such taxable service;

o Description, classification and value of taxable service provided and

o The service tax payable thereon.

Exporter has to furnish undertaking that the service tax, for which refund has been

claimed, has been paid.

• Further instruction has been issued by CBEC that, 80% of the refund amount due is to be

sanctioned as adhoc interim refund to following category of exports having good track

record, within 15 days of filing of a refund claim, if that refund claim is complete and

contains the requisite documents:

o all exporters having export turnover of more than Rs 5 crore in the current or preceding

financial year;

o PSUs including PSUs of State Governments;

o Star Export Houses as specified under Chapter 3.5 of the Foreign Trade Policy, 2004-2009;

o Manufacturer-exporters registered with Central Excise who have been exporting

during the previous two financial years and have minimum export of Rs. 1 crore or

more during the preceding financial year.

o exporters registered with service tax or central excise who have paid central excise

duty and/or service tax amounting to Rs. 1 crore or more during the preceding financial

year;

o All Export Oriented Units.

In view of the above clarification and notification claiming of refund of service tax by exporters

Under Notification 41/2007 ST becomes simpler and faster

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