All Industry Service Tax Rate - likely in this Budget
YESTERDAY the Finance Minister Pranab Mukherjee released the Report of the Task Force on Transaction Cost in Exports.
The Task Force had recommended that a scheme should be formulated to provide refund of service tax in the form of All Industry Service Tax Rate refund like All Industry rate of Duty Drawback. Those exporters who are not satisfied with the All Industry Service Tax rate may opt for a brand rate of Service Tax, as in the case of fixation of brand rate of Duty Drawback for export goods. A timetable to operationalise All Industry Service Tax rate may be outlined.
The report also says that this is to be implemented soon. Apparently this will be announced in the budget.
Picture shows Ministers Anand Sharma, Pranab Mukherjee and Jyotiraditya Scindia with report
ANOTHER recommendation of the Task Force which is to be implemented soon is, “ Till the time, EDI connectivity between Customs and Excise is put in place, a system as prevalent in Excise may be introduced for EP schemes to enable filing of a single running bond for all Custom locations.”
The Report says that the following recommendations are already implemented:
1. Since factory and transportation operations are usually round-the- clock, a shift-wise working system should be developed for customs and excise officials especially to cater to import /export workload on weekends. This can be done initially, on a trial basis, for some identified locations.
2. For faster import/export clearances and decongestion at Ports, more firms should be enlisted under Accredited Client Programme ( ACP ) of Customs. For this, eligibility criteria for ACP should be relaxed e.g. issue of Show Cause Notice for procedural irregularities should not be a criteria for ineligibility under ACP . In addition, Risk Management System ( RMS ) of Customs should include, export status of the firm i.e Export House/ Trading House etc. as one of the risk parameters in the RMS module.
3. Scheduling of factory stuffing inspection should be provided online by Excise and a single factory stuffing permission should be provided by Customs which will be valid for all Custom Houses.
4. A large number of cases exist where unutilized CENVAT credit has not been refunded to the exporter by the Excise. Clear procedures and guidelines need to be prescribed by CBEC for grant of refund of credit balance lying in CENVAT Credit (beyond a period of 3 months); and a system of monitoring where refunds are not granted on time may be institutionalized.
5. Requirement of Mate receipt by Central Excise for establishing actual date of export should be dispensed with.
The following recommendations under consultation with the Ministries for agreement / implementation:
1. Drawbacks should be processed without the requirement of EGM filing by shipping /Air lines and should be processed based on ‘Let Export Order' given by Customs.
2. Till EDI is implemented between SEZs and Customs, clearances by gateway ports should be permitted based on electronic transmission (email/fax) of export documents received from SEZ .
3. Till EDI is implemented between SEZs and Customs, short shipment of consignment received from SEZ should be permitted at gateway port and, exporter may be asked to file rectified shipping documents
4. to the SEZ port for short-shipped quantity within a stipulated period of time.
5. In line with the provisions of Foreign Trade Policy, payments received through ECGC /General Insurance Companies and specific write-off from RBI on account of default by buyer (for not remitting export proceeds) should be counted for providing Duty Drawback benefits also and exporter not to be penalized by asking for refund of export incentives.
6. Timelines to establish EDI connectivity between Central Excise and other agencies like Customs and DGFT should be decided on a priority basis so as to enable electronic flow of trade documents like ARE, Shipping Bill, Bond information etc. to various user departments.
7. Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 need to be amended so as to allow duty free commercial shipments brought through courier (as listed in Ch IB of Foreign Trade Policy) to be processed/cleared in EDI mode.
8. Customs Circular 5/2010- Cus should be amended which provides for detailed verification of export obligation fulfillment of EPCG Licences in the 1st block and, instead of a detailed verification, a statement of exports made against EPCG license should suffice.