Govt on overdrive to grant service tax refunds to exporters

Govt on overdrive to grant service tax refunds to exporters



In a recently issued SERVICE TAX CIRCULAR NO. 106/09/2008 DT. 11.12.2008 , Central Board of Excise and Customs (CBEC) has relaxed the procedures for refund of tax paid on specified services used for export of goods with a direction to its formation to pay refund claims in 30 days.



Earlier a Circular No. 101/4/2008-ST, dated 12.5.2008 was issued whereby the procedural difficulties that were being faced by the merchant exporters and the exporters having multi location offices were resolved. Subsequently, notification No. 32/2008-ST, dated 18.11.2008 has also been issued to extend the period of filing of refund claim by the exporter from 60 days to six month and from the end of the quarter to which such refund claim pertains and also to allow refund on testing service, without any copy of agreement with the buyer of goods, if such testing and analysis is statutorily stipulated by domestic rules and regulations.



In signification move Board has taken up the issue of the exporters that are not registered with the central excise. Now the unregistered exporters will have to file a refund claim. Board circular mentions it that " (i) He shall file the claim with the central excise authority having jurisdiction the over factory of manufacture [para 2 (b)(i) of the notification];



(ii) He shall file a declaration in the format given in the annexure to the notification. The CX authority would issue a STC No. (Service Tax Code) to him [para 2 (c) and 2(d) of the notification].

The Board has further decided that simplified procedure for refund, as prescribed by the Board vide circular No. 828/5/2006-CX dated 20.4.2006 for sanction of refund/rebate of unutilized CENVAT credit under rule 5 of the CENVAT Credit Rules, 2004/rebate would apply to refund claims under notification No. 41/2007-ST. Under this simplified procedure, 80% of the due refund amount is sanctioned as adhoc interim refund to specified category of exporters having good track record, within 15 days of filing of a refund claim, subject to the condition that refund claim is complete and contains the requisite documents.



This simplified procedure for sanction of refund/rebate is applicable only to the following categories of exporters having good track record i.e. exporters against whom no offence case has been booked by the Department during the preceeding three years or/and where no recovery of short levy is pending on date.



(a) All exporters who have an export turnover of Rs. 5 crores in the current year or the preceding financial year.



(b) Public Sector Undertakings including PSUs of the State Government.



(c) Star Export Houses as specified under Chapter 3.5 of the Foreign Trade Policy, 2004-2009.



(d) Manufacturer-exporters registered with Central Excise who have been exporting during the previous two financial years and have minimum export of Rs. 1 crore or more during the preceding financial year.



(e) Manufacturer-exporters registered with Central Excise who has paid duty of Rs. 1 crore or more during the preceding financial year.



(f) All Export Oriented Units.