Nepal Restrictions still Linger - Intentional? Will CBEC clarify?
THE Government had vide notifications 24-29/CE(NT) dated 05.12.2011 amended six CE NT Notifications to delete the special procedure for export of goods to Nepal. Those notifications prescribed the procedure, conditions etc. for exports to countries other than Nepal and Bhutan.
Resultantly, export to Nepal was made just like export to any other country. These amending notifications were effective from 01.03.2012.
Incidentally, they forgot to amend Notification No. 21/2004-CE(NT), which they amended by notification 02/2012-CE(NT) dated 22.02.2012.
While reporting the December 2011 notifications we had in DDT 1750 mentioned Export to Nepal - Liberalisation - What about Service Tax?.
CBEC did not react.
We again made a mention while reporting the notification 02/2012-CE(NT).
DDT 1802 said -
But what about Service Tax? In 12.12.2011, it was pointed out,
Notification No. 11/2005-Service Tax, dated 19.04.2005 grants rebate of Service Tax on taxable services exported to countries other than Nepal and Bhutan.
Similarly, Notification No. 12/2005-Service Tax, dated 19.04.2005 grants rebate of the duty paid on excisable inputs or service tax and cess paid on taxable input services used in providing taxable service exported to countries other than Nepal and Bhutan,
Why Nepal is retained in these two notifications? Has the Board forgotten these notifications or is it intentional?
That was in February, 2012. Three years have gone by and nothing has been done. Perhaps the "retention" of "Nepal" in these notifications is "intentional". But what is the intention?
Yesterday, we received a mail from a netizen asking us why DDT is silent all these years on the issue. Unfortunately, we can only point out the dirt - we can't clean it.
The Netizen also pointed out another notification which craves for similar attention.
It is the SSI Notification 8/2003-CE -
Paragraph 5, Explanation clause "G" reads -
G) "clearances for home consumption", wherever referred to in this notification, shall include clearances for export to Bhutan and Nepal;
The Netizen quips -
"When export to Nepal is at par with export to other countries, then if the export clearances made to Nepal is to be included in the clearances for home consumption, it will be a disadvantageous position for assessees clearing their goods for export to Nepal. In my view notification 8/2003 ought to have been amended accordingly."
DDT hopes that this time around, before the Budget Notifications are issued, the CBEC will rectify this anomaly.
Or clarify that the discrimination is intentional. The Prime Minister wants a special relationship with Nepal - will CBEC jeopardise that?
Please also see No rebate to Exporters of Services to Nepal . . . But why !!!