EXEMPTION FROM SERVICE TAX

EXEMPTION FROM SERVICE TAX

1. General points to be noted

1. The exemption shall be claimed by the exporter for the specified service received and USED BY HIM FOR EXPORT OF THE SAID GOODS.
2. The exemption claimed by the exporter shall be provided by way of REFUND of service tax paid.
3. The exporter claiming the exemption has actually PAID the service tax on the specified service to its provider.
4. No CENVAT credit of service tax paid has been taken under the CENVAT Credit Rules, 2004.
5. The person liable to pay service tax under section 68 of the Finance Act, 1994 shall not be eligible to claim exemption for the specified service.
6. The manufacturer-exporter, who is registered as an assessee under the Central Excise Act, 1944 or the rules made there under, shall claim the exemption by filing a claim for refund of service tax paid on specified service to the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture, in Form A-l.
7. The exporter who is not so registered under the provisions referred to in point (6) above, shall before filing a claim for refund of service tax, file a declaration in Form A-2 with the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having the jurisdiction over the registered office or the head office, as the case may be, of such exporter.
8. The Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, shall, after due verification, allot a service tax code (STC) number to the exporter [referred to in point (7) above] within seven days from the date of receipt of the said Form A-2.
9. The exporter, referred to in point (6) or (7) , shall file the claim for refund of service tax to the Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory of manufacture, registered office or the head office, as the case may be, of such exporter in Form A-l.
10. The claim for refund shall be filed within one year from the date of export of the said goods.

11.For each taxable service specified in column(3) of the Schedule above, the exporter shall enclose all the documents specified in corresponding entry in column (4) of the said Schedule and the Form A-l with the claim of refund.

12. No refund claim shall be allowed if the same is for an amount less than Rs. 500.
13. Where -

(a)  Total amount of refund sought under a claim is upto 0.25% of the total declared free on board value of export;

(b)  The exporter is registered with Export Promotion Council sponsored by the Ministry of Commerce or the Ministry of Textiles;

(c)  Subject to the provisions of (a) and (b) above, each document specified in clause (b) and in column (4) of the said Table shall be enclosed with the claim;

(d) invoice, bill or challan, or any other document issued in the name of the exporter, showing payment for such service availed and the service tax payable shall be submitted in original after being certified in the manner specified in sub-clauses (e) and (f);

(e) the exporter is a proprietorship concern or partnership firm, the documents enclosed with the claim shall be certified by the exporter himself and where the exporter is a limited company, the documents enclosed with the claim shall be certified by the person authorised by the Board of Directors;

(f) the documents enclosed with the claim shall contain a certificate from the exporter or the authorised person to the effect that specified service, to which the document pertains, has been received, the service tax payable thereon has been paid and the specified service has been used for export of goods under the shipping bill number;

14. Where the amount of refund sought under a claim is more than 0.25% of the declared free on board value of export, such certification, shall be done by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of the Companies Act, 1956 or the Income Tax Act, 1961, as the case may be.

1. How will Assistant Commissioner/Deputy Commissioner of Central Excise check the accuracy of refund claimed by Exporter?

The Assistant Commissioner/Deputy Commissioner of Central Excise, as the case may be, shall, after satisfying himself, -

(i) that the claim filed is complete in every respect;

(ii) that all the documents requiring certification have been filed after due certification;

(iii) about the arithmetical accuracy of the claim, shall refund the service tax paid on the specified service within a period of 1 month from the receipt of said claim.

However, where the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise has reason to believe that the claim, or the enclosed documents are not in order or that there is a reason to deny such refund, he may, after recording the reasons in writing, take action, in accordance with the provisions of the said Act and the rules made there under.

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