Government extends refund of service tax paid by exporters

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Government extends refund of service tax paid by exporters

AIT News Network

NEW DELHI. 6th October 2007

Cargo Ship Government has issued Notification No. 41/2007-ST, dated 06.10.2007 , extending refund of service tax paid by exporters on additional three taxable services, which are not in the nature of "input services" but could be linked to export of goods.

(i) General Insurance Services provided to an exporter in relation to insurance of export goods. (Section 65[105][d] of the Finance Act, 1994)

(ii) Technical testing and Analysis Agency Services in relation to technical testing and analysis of export goods. (Section 65[105][zzh])

(iii) Inspection and Certification Agency Services in relation to inspection and certification of export goods. (Section 65[105][zzi])

Further, the notification No.40/2007-ST dated 17.9.07 providing refund of service tax paid on the specified taxable services has been superseded and a consolidated notification No.41/2007 has been issued and refund is now allowed on 7 specified services mentioned in the Notification.

The procedure for claiming refund is as under:

(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, as the case may be, having jurisdiction over the registered office or the head office, as the case may be, of such exporter;

(c) the exporter who is not registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, or the said Finance Act or the rules made thereunder, shall, prior to filing a claim for refund of service tax under this notification, file a declaration in the Form annexed hereto with the respective jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be;

(d) the jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall, after due verification, allot a service tax code (STC) number to the exporter within seven days from the date of receipt of the said Form;

(e) 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 have been 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);

(f) 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;

(iii) wherever applicable, a copy of the written agreement entered into by the exporter with the buyer of the said goods, as the case may be;

(g) 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;

(h) 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.

(Click here for Service Tax Notification No.41/2007 dated 6th October 2007)

Exporters allowed Refund of service tax on specified services