HOW TO CLAIM REBATE OF SERVICE TAX PAID ON INPUT SERVICES

Earlier the procedure for refund of service tax paid on the services received by an exporter and used for the export of goods was governed by Notification No. 52/2011 dated 30-12-2011. In the new regime with the advent of the Negative list approach the said notification has been superseded by Notification No.41/2012 dated 29-06-2012. The rebate shall be granted by way of refund of service tax paid on the specified services.

MEANING OF SPECIFIED SERVICES

Specified Services means

(i) In the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of said goods.

(ii) In the case of other goods, taxable services used for the export of said goods but shall not include any service mentioned in sub-clauses (A), (B), (BA) and (C) of rule 2(I) of the Cenvat Credit Rules, 2004.

PLACE OF REMOVAL

Rebate of input service tax is allowed for services used beyond the place of removal

Place of Removal means:

(i)                  A factory or any place or premises of production or manufacture of the excisable goods from where such goods are removed;

(ii)                A warehouse or any place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed;

(iii)               A depot, premises of a consignment agent or any place or premises from where the excisable goods are to be sold after their clearance from the factory and from where such goods are removed.

MANNER OF CLAIMING REBATE

Exporters are provided with two options. The first process allows rebate of service tax paid on eligible specified services as a percentage value of the declared Free on Board (FOB) value of the export goods on the basis of the rates specified in the schedule. The other procedure for rebate is Rebate on the basis of documents.

PROCEDURE

1.       ELECTRONIC REBATE:- Under this, service tax paid on the specified eligible services shall be calculated electronically by the ICES system, by applying the rate specified in the schedule as a percentage of the FOB value.

Conditions:-

Ø  The exporter should have a central excise registration or service tax code number registered with customs ICES. In case exporter doesn’t have it can be obtained by filling declaration in Form A-2 to the jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise.

Ø  The exporter should have a bank account as rebate will be deposited in the bank account of the Exporter.

Ø   The exporter should declare his option to avail service tax rebate on the electronic shipping bill while presenting to the proper officer of customs.

Ø  Minimum rebate for an electronic shipping bill is Rs.50.

Ø  An exporter claiming refund electronically cannot claim it again on the basis of documents.

2.       REBATE ON THE BASIS OF DOCUMENTS: Registered exporters shall file a claim for refund in Form A-1 to the jurisdictional AC/DC of Central excise attached with relevant invoice, bill, challan evidencing payment of specified service used for the export and service tax payable. If an exporter does not have service tax code number he should follow the same procedure as described above.

Conditions:-

Ø  There must be actual payment of service tax.

Ø  Time- limit for filling rebate claim shall be one year from the date of export of goods.

Ø  Minimum amount of rebate is Rs.500.

Ø  Sale proceeds must be received by on or on behalf of exporter within the time period allowed by RBI.

Ø  If service tax has been paid under reverse charge mechanism then service receiver will not be eligible to claim refund.


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This Article has been Shared by Student of ICAI Palak Aggarwal. She can be reached at aggarwal.palak2809@gmail.com