Exports - Service Tax - Exempted?
Every Newspaper and everyone in the other media in the country screamed that Service Tax has been abolished/waived/exempted on exports in the Foreign Trade Policy announced by the Commerce Minister. Nobody has reported that it is not the Commerce minister who decides about exemption of Service Tax. In 2004, the Hon'ble Commerce Minister announced that EOUs are exempted from paying Service Tax. But the Revenue Ministry was not impressed. And they did not issue any notification to that effect. The hype about this new benefit should be subject to the Notification from the CBEC! And most probably it will not come.
Now the Commerce Ministry is still struggling with the exemption and the Finance Ministry is silent and mind you there is absolutely no conflict between the ministers as has been clarified.
The Commerce ministry now wants Trade and Industry Association, EPCs, Commodity Boards and other stakeholders to forward the list of services linked to exports which may be eligible for service tax remission / exemption. It would be relevant if illustration showing calculation basis for arriving at the exact figure for exemption / remission are also submitted. Of course they wanted comments by 10th July 2007 - that is yesterday!
Now what are they going to do with that list? Most probably forward it the CBEC. They could have asked the stake holders to forward the list directly to the waste Paper Basket of CBEC!
Really difficult to get out of the situation. In the mean time of course you can call for comments and reports and issue a few clarifications. It is three months since the minister announced the exemption (with the concurrence of the PM) and they are still going round asking for lists and calculations. Are they going to announce a drawback rate for Service Tax?