Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
Circular No. 112/06/2009 – ST
New Delhi, dated the 12th March, 09
Sub:- Filing of claim for refund of service tax paid under notification No.
41/2007-ST dated 6/10/2007 – reg.
Notification No. 41/2007-ST, dated 6/10/2007 allows refund of service tax paid
on specified services used for export of goods. To resolve the procedural
difficulties arising in implementation of this refund scheme the Board has
earlier issued
circulars No. 101/4/2008-ST, dated 12.5.2008 and No.
106/9/2008-ST dated 11.12.2008.
2. The Board has received further references from field formations and trade
seeking clarification on other procedural issues. These issues and the
clarification are discussed in the following Table.
TABLE
| S. No. |
Issue Raised |
Clarification |
| I |
Notification No. 41/07-ST has been amended by notification Nos. 32/2008-ST,
dated 18.11.2008 and 33/2008-ST, dated 7.12.2008 to (i) extend the limitation
period from 60 days from the end of quarter to six month; (ii) to omit the
condition of non-availment of drawback. Whether, in view of amended conditions,
refund for the quarter Mar-Jun 08 would be allowed to be filed till Dec 08?
|
It is clarified that consequent upon revision of limitation period, any refund
claim that is filed within such revised limitation period would be admissible if
it is otherwise in order. Therefore, refund claims of service tax on specified
taxable services used for exports of goods made in the quarter Mar-Jun 08 could
be filed till 31st Dec 08.
|
| II |
The bank deducts certain commissions from the export remittance in lieu of
service provided by them. Refund is not allowed on such deduction. Refund should
be allowed on the gross remittances.
|
Refund is admissible on the basis of gross amount received for the exports and
deductions made by the banks from export remittances, in lieu of services
provided by bank, should not be deducted while granting refund.
|
| III |
For exporters exporting to a customer regularly, the foreign exchange remittance
certificates (FIRC) are made on running account basis by the banks. Therefore,
it is often not possible to show the linkage between the export invoice and the
remittance. This has resulted in denial of refund.
Further in case where payments are received by cheque, banks do not issue FIRC
and refunds are denied.
|
In such cases where FIRCs are issued on consolidated basis, the exporters should
submit self-certified statement alongwith FIRC showing the details of export in
respect of which the FIRC pertains. Refunds should be allowed on such certified
statements. However, exporters should maintain a register showing running
account which should be reconciled between the export and the remittance
periodically.
In cases where banks do not issue FIRC for the reason that payments are received
by cheque, refund may be allowed on the basis of duly certified bank statement. |
| IV |
Whether the limitation period of six month would be counted from the date of
exports or from the date of receipt of remittances?
|
It is clearly prescribed in the notification that limitation period of six month
is to be computed from the date of exports.
|
V
|
Whether refund would be admissible on specified taxable service received prior
to the date it is notified in the said notification, if such services are used
in relation to goods which are exported subsequent to the date on which such
taxable services are notified under notification No. 41/2007-ST.
|
Being prospective in nature refund is not admissible on such services received
prior to the date they are notified in the said notification, even if the goods,
in relation to which these services are used, are exported after the date when
such services are notified under notification No. 41/2007-ST.
|
| VI |
Authorities granting refund are insisting on original documents such as invoice,
BL, SB, BRC etc. Such documents are required under the law to be kept in the
Head office for audit. Refunds are denied on this ground. |
Normally certified copy of the documents should be accepted. Only in case of
in-depth enquiry original documents can be verified.
|
| VII |
The service provider providing services to the exporter provides various
services. But he has registration of only one service. The refund is being
denied on the grounds that the taxable services that are not covered under the
registration are not eligible for such refunds.
|
Notification No. 41/2007 ST provides exemption by way of refund from specified
taxable services used for export of goods. Granting refund to exporters, on
taxable services that he receives and uses for export do not require
verification of registration certificate of the supplier of service. Therefore,
refund should be granted in such cases, if otherwise in order. The procedural
violations by the service provider need to be dealt separately, independent of
the process of refund. |
| VIII |
Whether refunds under notification No. 41/2007-ST, dated 6.10.2007 would be
admissible for the quarter July-Sep 2007.
|
The notification No.41/2007-ST exempts service tax on specified taxable services
used for export of goods. This exemption is operated through the route of
refund. Being prospective in nature, refund could only be sanctioned on taxable
services provided on or after the date they are notified in the said
notification, i.e., 6.10.2007.
|
3. The pending refund claims may be decided accordingly. It is once again
reiterated that refund claims be sanctioned expeditiously within the time
prescribed by the Board. Any difficulty faced in processing of refund claims
under aforesaid notification may be immediately brought to the notice of the
undersigned
Yours faithfully,
(Gautam Bhattachraya)
Commissioner (ST)
F.No.137/84/2008-CX.4