TIOL-DDT 98 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000CC" size="3">TIOL-DDT 98</font><br> 20 04 2005<br> Thursday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Export of Services – Rebate</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 5 of the Export of Services Rules, 2005, Rebate is to be granted by notification, on <br> <br> 1. Service Tax paid on export of services <br> 2. Service Tax paid on input services used in providing exported services<br> 3. duty paid on inputs used in exported services<br> <br> subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.<br> <br> Now the Government has issued two notifications, 11 and 12/2005 – Service Tax dated 19.04.2005 to prescribe the procedure.<br> <br> Notification 11/2005 deals with rebate of Service Tax and cess paid on exported services except to Nepal and Bhutan and prescribes that <br> <br> • the taxable services are exported and payment has been received in India in convertible foreign exchange;<br> <br> • the amount of rebate is not less than five hundred rupees<br> <br> • if the Service Tax is not paid or if the services are not exported, the rebate will be recovered with interest.<br> <br> • The claim to be submitted to the jurisdictional Assistant Commissioner/ Deputy Commissioner along with the relevant documents.<br> <br> • Claim to be filed in Form ASTR-1<br> <br> <b>There is an implied understanding in the form that the Assistant Commissioner should grant the rebate within 15 days.</b><br> <br> 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<br> <br> • that the service tax and cess, rebate of which has been claimed, have been paid on the input services;<br> <br> • no CENVAT credit has been availed of on inputs and input services on which rebate has been claimed<br> <br> <b>There is a slight difference in the procedure to claim rebate in this case. </b><br> <br> • 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.<br> <br> • Assistant Commissioner to verify and accept the declaration.<br> <br> • Inputs to be received under an invoice directly from a registered factory or dealer.<br> <br> • Input services to be received under an invoice, Challan etc.<br> <br> • Claim to be filed in Form ASTR-2<br> <br> These notifications apply only for exports to countries other than Nepal and Bhutan. What about export to these countries? Wait for a fresh notification. <br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2005/stnot05_11.htm">Notification No. 11</a> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2005/stnot05_12.htm">& 12/2005-Service Tax, Dated: April 19, 2005</a><br> <br> <font color="#006633"><b>Some Service Tax riddles</b></font><br> <br> DDT is scared to raise any issue on Service Tax for it may lead to a solution worse than the problem. As they say <b>“For every problem, there is a solution that is simple, neat, and <font color="#0000CC">wrong</font>”.</b> Many netizens write to us demanding that we highlight the issues so that the problems get resolved. Here are a few riddles that have been bothering many a confused assessee.<br> <br> 1. Is there a cenvat return for the service providers taking credit? If so what is the form?<br> <br> There is indeed a return required to be filed as per Rule 9(9) of the Cenvat Credit Rules, in a form specified by notification by the Government. The service provider is committing an offence by not filing this return but is not the Government a bigger offender in not specifying the form of this return so far? May be they have forgotten about the existence of this provision in the Rule.<br> <br> 2. What is the document under which credit can be taken for Service Tax on goods transport paid by consignor or consignee? <br> <br> Sadly, there is no document prescribed under Rule 9 (1) of the Cenvat Credit Rules. So if you are taking credit on such tax, you are an offender - because the Government has not notified the document for this purpose under Rule 9(1). <br> <br> 3. Will the value of exempted services be taken into consideration for computing the aggregate value of SSI exemption of Rs. 4 Lakhs? <br> <br> It seems many officials have taken a stand that the value of exempted services is also to be added to arrive at the Rs. 4 Lakhs value. But the Explanation to Notification No. 6/2005 dated 1.3.2005 clearly states <b>but does not include payments received towards such gross amount which are exempt from whole of service tax leviable thereon under section 66 of the said Finance Act under any other notification.<br> </b><br> 4. Where do you register if you want centralized registration and your offices are spread right across the country? <br> <br> As per Rule 4(3)(b) of the Service Tax Rules, this registration is to be done by an authority to be specified by the Board. Ask the Board when it is going to specify this authority. <b>Till such time no centralized registration!</b><br> <br> 5. What is common to MTNL, BSNL IDEA CELLULAR, AIRTEL, HUTCH, RIM, TATA INDICOM? <br> <br> You will say they are all telephone companies but they provide different kind of services. The common factor is, <b>they are all Service Tax offenders.</b> From 1.4.2005, as per Rule 4A of the Service Tax Rules, “Every person providing taxable service shall, not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier issue an invoice”. Aren’t these phone companies issuing monthly invoices? <br> <br> 6. Is a consignor factory (manufacturing excisable goods) paying Service Tax on goods transported to the customer’s premises eligible for taking credit on the tax paid by him? <br> <br> I will leave that to you. If you would like to share your answer, <b>please mail it to me.</b><br> <br> <font color="#006633"><b>PM SPEAK</b></font><br> <br> Prime Minister Dr. Man Mohan Singh, speaking to IAS probationers yesterday said, <br> <br> <b>• An important responsibility of the civil services is to ensure that citizens do not fear arbitrary governments;<br> <br> • What happened in Gujarat has caused a scar on the body politic. Such things should never happen in future. <br> <br> • our system of governance must address the primary task of developing our economic and social potential to enable our country get rid of poverty , ignorance and disease in the shortest possible time;<br> <br> • significant portion of the national expenditure is accounted for by the government and it is very important that this expenditure is wisely incurred and while decisions are taken, a full record should be kept to ensure efficiency and ensure that spending processes do not give rise to corruption.<br> <br> • Be sensitive to the winds of change and be flexible to assume that you do not have the monopoly of the system all the time.<br> <br> • India needs people who have capacity and courage to take bold decisions. Our system must recognize the difference between honest mistakes made while discharging duties and willful attempt to misuse public office. That is a challenge for all of us. <br> <br> • We must have abiding faith in our value system. You are the most elite services in our country. Our country needs top class civil servants. You are thus nation builders in the truest sense of the term. Make good use of the opportunities you have and keep the values in mind while working so that we can build the India of our dreams.</b><br> <br> Will the FM speak to the IRS probationers?<br> <br> <font color="#FF6666"><b>Until Tomorrow with more DDT<br> <br> Have a Nice Time<br> <br> Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b><br> <br> </font></p> </body> </html>