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Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Service Tax Wing
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Circular No. 195/05/2016-Service Tax
New Delhi, dated 15th June, 2016
To
All Principal Chief Commissioners of Central Excise
All Chief Commissioners of Central Excise/Service Tax
Principal Directors General of Goods & Services Tax/Systems/Central Excise
Intelligence Director General of Audit/Tax Payer Services
All Principal Commissioners/Commissioners of Central Excise/Service Tax
All Commissioners of Central Excise/Service Tax (Audit)
Principal Commissioners/Commissioners LTU, Joint Secretary TRU-I/TRU-II/Review
Commissioner Central Excise/Legal/PAC/Taxpayer Services
Madam/Sir
Subject: Speedy disbursal of pending refund claims of exporters of
services under rule 5 of the CENVAT Credit Rules, 2004
I am directed to refer to Board’s
circular No. 187/6/2015-Service Tax
dated 10th November, 2015 on the above subject and to inform that in
the light of some representations received in this context from accounting
bodies, industry associations and others, the following points are clarified.
2.0 Applicability of the scheme
2.1 At the outset it is reiterated that this scheme is not a substitute for
the various notifications but is meant to complement them and is aimed at
enabling ease of doing business. It has to operate within the general parameters
of the notifications governing such refunds.
2.2 This scheme is applicable only to service tax registrants who are exporters
of services, with respect to refund claims under rule 5 of the CENVAT Credit
Rules, 2004, which have been filed on or before 31-3-2015, and
which have not been disposed of as on the date of the issue of the circular
dated 10-11-2015. As clarified therein, claims which have been remanded are out
of the purview of this scheme.
3.0 Additional documents to be submitted (i.e. in addition to those
required to be filed along with the claim)
3.1 At the outset, the relevance of the certificate has to be clearly
understood. It is not a substitute for verification by the refund sanctioning
authority. It will ensure diligence on the part of the claimant and the
statutory auditor, which will make him eligible for a provisional payment of 80%
of the claimed amount. It had been clarified in the circular that the decision
to grant provisional payment is an administrative order and not a quasi-judicial
order and should not be subjected to review. There is thus no reason to treat
either the certificate or the provisional payment with fear or suspicion.
3.2 The certificate has to be furnished by the statutory auditor in the case of
companies, and from a chartered accountant in the case of assessees who are not
companies, in the prescribed format. The phrase “statutory auditor” will refer
to the auditor who prepares the financial statements under the Companies Act
2013. The certificate cannot be furnished by a Cost and Management Accountant or
a Company Secretary. In the case of companies, it cannot be furnished by a
Chartered Accountant who is not the statutory auditor.
3.3 The certificate has to be given in the format given in Annexure-1 to the
circular dated 10-11-2015. During the conference of Service Tax Chief
Commissioners and Commissioners in November 2015 itself, it had been clarified
that “the averments in Annexure-1 have to be made and any general additional
remarks, which do not negate the wording of paragraphs 1.1 to 1.4, may be
ignored.” Inspite of this it has been reported that general disclaimers by the
auditor are resulting in the rejection of the certificate and consequently the
claim for 80% provisional payment.
3.4 It must be understood that auditors while discharging their duties are bound
by the provisions of the statute governing them as well as Guidance Notes,
Accounting Standards etc relating to their profession. The Institute of
Chartered Accountants of India has issued Guidance Notes on reports and
certificates issued by auditors. These Guidance Notes relate to situations where
the auditor has freedom with respect to the wording of a certificate as well as
to situations where he has to adhere to a prescribed format. In both situations
the auditor has to indicate the manner in which the audit was done, assumptions,
limitations in scope and reference to information and explanations obtained in
the certificate. Adherence of the auditors to these requirements should not be
considered to be violations of the circular. If at all, by mentioning that they
have adhered to the various legal and accounting requirements, they are adding
value to their certificate. It is clarified once again that as long as the four
points which are contained in Annexure-1 to the circular dated 10-11-2015 are
present, the certificate should not be rejected on the ground of any disclaimers
which the auditor has to give, owing to the Guidance Notes.
4.0 Principal Chief Commissioners/Chief Commissioners should ensure that the
contents of this circular are brought to the notice of the claimants as well as
the departmental officers.
Yours faithfully,
(Rajeev Yadav)
Director (Service Tax)
F. No. 137/62/2015-Service Tax
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