Services received from goods & transport agents exempted from service tax
RETURNS CAN BE FILED ONCE A YEAR
As the exporters have to focus more on export promotion during this time of downturn, they should be freed from these cumbersome procedures for claiming refund of service tax. Therefore, following changes are proposed in the scheme, with the basic ideas of placing more trust in the exporters. The announcement to this effect was made in the General Budget 2009-10
a) Services received by exporters from goods transport agents and commission agents, where the liability to pay service tax is ab initio on the exporters, will be exempted from the service tax. Thus, exporters will not pay any tax in advance relating to these services. b)
c) For other services received by exporters, exemption of service tax can be claimed through the existing mechanism through self certification of documents where value of refund is below 0.25 per cent of the FOB value. For higher values, it can be claimed on the basis of documents certified by a Chartered Accountant. d)
It is an international practice to zero rate exports i.e. ‘taxes’ are not to be exported. To achieve this objective, a scheme of refund of service tax on certain taxable services used after the clearance of export goods from the factory was announced in 2007. However, exporters faced difficulties in obtaining such refunds.
Service tax returns can be filed after one year instead of being filed quarterly which will considerably reduce paper work.