Export of Services – Rebate
As per Rule 5 of the Export of Services Rules, 2005, Rebate is to be granted by notification, on
1. Service Tax paid on export of services
2. Service Tax paid on input services used in providing exported services
3. duty paid on inputs used in exported services
subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.
Now the Government has issued two notifications, 11 and 12/2005 – Service Tax dated 19.04.2005 to prescribe the procedure.
Notification 11/2005 deals with rebate of Service Tax and cess paid on exported services except to Nepal and Bhutan and prescribes that
• the taxable services are exported and payment has been received in India in convertible foreign exchange;
• the amount of rebate is not less than five hundred rupees
• if the Service Tax is not paid or if the services are not exported, the rebate will be recovered with interest.
• The claim to be submitted to the jurisdictional Assistant Commissioner/ Deputy Commissioner along with the relevant documents.
• Claim to be filed in Form ASTR-1
There is an implied understanding in the form that the Assistant Commissioner should grant the rebate within 15 days.
Notification No. 12 deals with rebate on inputs and input services used in exported services. In addition to the requirements in Notification 11/2005, it is stipulated that
• that the service tax and cess, rebate of which has been claimed, have been paid on the input services;
• no CENVAT credit has been availed of on inputs and input services on which rebate has been claimed
There is a slight difference in the procedure to claim rebate in this case.
• Before export, a declaration is to be filed with Assistant Commissioner describing the taxable service to be exported with details of inputs and input services required for exporting the service.
• Assistant Commissioner to verify and accept the declaration.
• Inputs to be received under an invoice directly from a registered factory or dealer.
• Input services to be received under an invoice, Challan etc.
• Claim to be filed in Form ASTR-2
These notifications apply only for exports to countries other than Nepal and Bhutan. What about export to these countries? Wait for a fresh notification.
Notification No. 11 & , Dated: April 19, 2005