Exporters allowed refund of service tax on specified services

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Exporters allowed refund of service tax on specified services

AIT News Network

Cargo Ship NEW DELHI. The Government has issued Service Tax 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])

The exemption from service tax on the above services is subject to the following conditions:

(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;

(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.

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.