Input services for export of goods – refund exemption – Board corrects errors and adds a couple of services.

By Vijay Kumar

Remember the feud between the Commerce and Finance Ministries on the exemption from Service Tax for exports? Finally the Revenue relented and issued a notification on 17^th September allowing a complicated refund for certain services used for exports. The refund was allowed only for

1.Port Services provided for export. (Section 65[105][zn] of the Finance Act, 1994)

2.Other port Services provide for export. (Section 65[105][zzl])

3.Services of transport of goods by road from ICD to port of export provided by Goods Transport Agency. (Section 65[105][zzp])

4.Services of transport of export goods in containers by rail from ICD to port of export. (Section 65[105][zzzp])

Please see DDT 701 dated 18.09.2007

Now the Revenue has amended the Notification basically to rectify certain mistakes, but the amendment is made cleverly to allow the benefit for some more services.

Now the benefit will be allowed only if the

said goods have been exported without availing drawback of service tax paid on the specified services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995;

A couple of conditions are added as follows:-

1.(c) the exporter who is not registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, or the said Finance Act or the rules made thereunder, shall, prior to filing a claim for refund of service tax under this notification, file a declaration in the Form annexed hereto with the respective jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be;

2.(d) the jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall, after due verification, allot a service tax code (STC) number to the exporter within seven days from the date of receipt of the said Form;

One more document is added to the list of documents to be produced for claiming the refund.

(iii) wherever applicable, a copy of the written agreement entered into by the exporter with the buyer of the said goods, as the case may be;

And three services are added to the list of services eligible for the refund.

1.Services provided to an exporter by an insurer, including a re-insurer carrying on general insurance business in relation to insurance of said goods

2.Services provided by a technical testing and analysis agency in relation to technical testing and analysis of said goods where such technical testing and analysis is required to be undertaken as per the written agreement between the exporter and the buyer of the said goods.

3.Services provided by an inspection and certification agency in relation to inspection and certification of export goods where such technical inspection and certification is required to be undertaken as per written agreement between the exporter and the buyer of the export goods

Subject to certain conditions like

1.document issued by the insurer, including re-insurer, for payment of insurance premium shall be specific to export goods and shall be in the name of the exporter.

2.the exporter furnishes a copy of the written agreement entered into with the buyer of the said goods requiring testing and analysis of the said goods; and

3.the invoice issued by the service provider shall be specific to export goods and shall be in the name of the exporter.

Why do you make life so complicated?

Notification. No.41/2007-Service Tax Dated 6th October, 2007.