Johnny and Service Tax Refund
[Series- II]
Part 1:
INVOICE
Prepared By: -
CA. Pradeep Jain
Mayank Palgauta
We have already written one complete series of articles for
the refund of service tax to exporters under notification no. 41/2007-ST. The litigation
on the same is still going on. The Government has come up with the new notification
no. 17/2009-ST dated 7th July, 2009 to make the scheme simple so that the refund
is available to the exporters conveniently. But there is no sign of relief for the
exporters. They are still struggling to get the refund from the department. With
this second series of the articles, an effort has been made to bring out the misery
of exporters. This also brings out the present situation existing in the refund
structure mechanism under Service tax. This state of affair also is elaborated with
the means of poems and conversation between Johnny (an assessee) and his father.
Johnny and Jill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.
Today, in the present scenario also, the poor exporter is
still facing enormous difficulty in getting refund orders as stated in the lines
above. There is no radical change has taken place even after the change of total
scheme by the Government. The refund claims are the Right of the exporters but the
department is rejecting these claims on various grounds which are of trivial importance.
This resulted in frustration and skepticism among exporters as regards the Refund
mechanism. The one of the conditions relating to INVOICE on which the department
is rejecting the refund claim on various services mentioned in the Notification
No. 17/2009-ST dated 7th July, 2009 (herein after referred to as said notification)
are highlighted here by means of poetic conversation: -
Johnny-Johnny!
Yes papa!
Got
the refund?
No
Papa,
Telling
lies?
No
Papa,
Whats
the reason?
This
papa: -
Johnny
says: I went to department to get the refund on various invoices issued by
service providers under said notification but department said: -
Johnny-Johnny
go away,
Come again another day.
Your refund order has following Flay: -
In relation to refund claim filed by the exporters, they require
the original invoices. It is told to them that the original invoices are required
by various departments. Hence the same cannot be given to you. But the department
is saying that it is condition of the notification and it cannot be relaxed. We
said that we can show the same to you and you compare the same with Xerox copies
given by us to you along with refund claim. Then give the same back to us per bearer.
But they did not agree. They say that the condition has been imposed so that the
double refund claim is not taken by you on the same invoice. We have told that you
can put a seal on these original invoices saying that the refund is claimed, not
to be used again. But they did not agree and told that it is condition precedent
for claiming the refund that the original invoices should be submitted with us.
We were helpless and submitted the original invoices. We were hopeful of getting
the refund thereafter. But we were not aware of the fact that we are dealing with
revenue department who can collect the crores of rupees but cannot give small refund
claim. The second objection was raised by them
Johnny-Johnny!
Yes papa!
Got
the refund?
No
Papa,
Telling
lies?
No
Papa,
Whats
the reason?
This
papa: -
Johnny
says: I went to department to get the refund on various invoices issued by
service providers under said notification but department said: -
Johnny-Johnny
go away,
Come again another day.
Your refund order has following Flay: -
All the original Invoices issued by a service providers like
Custom House Agent for CHA services or by a Cleaning and Forwarding Agent for cleaning
and forwarding services should have certificate as mentioned the notification 17/2009.
In this endorsement the assessee has to certify that the services mentioned in the
invoices have issued to the assessee; the service tax has been paid thereon by the
assessee and said services have been utilized in export of goods under the particular
shipping bill no. and its date. We have told them that we have made a rubber stamp
of this certificate and put it on Xerox copy of the invoice. But they said that
the same should be put on the original invoice. We have told that the original invoice
is required by many department and auditors. Hence, we will use them for various
purposes after the same is returned to us. But they did not agree and told that
the same should be put on the original invoice. We have no option but to agree their
demand. After the seal was put on original invoice, we asked for the refund. But
the department came with the next arrow. He has told that you have written in rubber
stamp the category of service, shipping bill number and date is as per table annexed
to refund claim. But the shipping bill number, category of service should be mentioned
on the invoice only. We have learnt from past experience that we have no option
before the department but to abide by the things as told to us. Hence, we followed
their instructions and corrected all the invoices in the hope of service tax refund
claim. The assessee submits that the reference of all the Shipping Bills and its
date has already given in tabular form with refund claim application. Thus the demand
of mentioning the reference of the same in each and every invoice of the service
providers has ridiculous point.
Johnny
says: I went to the department next day again with the corrections but department
rejected saying: -
Johnny-Johnny
go away,
You wont get refund anyway.
It has following more flay: -
The invoices of various service providers have not prepared
under Rule 4A of Service Tax Rules, 1994 as many of invoices are not serially numbered;
some invoices do not have the Service tax Registration no. of service providers
and some of them are not having the description of service provided during the course
of Export of goods. Even the same is not mentioned in the table annexed to the refund
claim. Furthermore, the same is not mentioned in certificate endorsed on the face
of invoice. We pleaded that when the service provider has not mentioned the above
details in his invoices then how we can know the above information like under which
category the service provider is providing the services. Further, we argued that
since these mistakes have not done on our part, the refund should not be denied
on these ridiculous grounds which are beyond the control of the assessee.
Unrewarding
again & again;
Johnny
now in grief and pain!
Refund
Order now a dream;
His
efforts have downstream!
Johnnys
contention:-
To fulfillment of the condition of submitting ORIGINAL INVOICES
to the department, we have produced all the ORIGINAL invoices of all the service
providers at the time of refund but these have not come back to the our custody
as the department contending that they will keep them for the purpose of refund
claim. They contend that even after the refund is sanctioned or rejected then the
file will go for audit and the department has to send the original invoices to audit
wing or review wing. Thereafter, if the appeal is filed then they will keep the
invoices with them.
Seeing these erroneous
interruptions, obstacles and arguments taken by the department, the exporter-assessee
wants to say one sentence to the Government that
HATHI
KE DANTH KHAANE KE AUR, DIKHAANE KE AUR
because on one point the Board is issuing the exemption notifications for promoting
the Export of goods outside India and on the other side Revenue department is not
happy to sanction the refund claim.
At the end all the exporters, whose refund claim is under
evolution from extensive time period, raise one question that why the Finance Minister
is not exempting the exporters from payment of service tax itself in order to remove
these types of silly troubles which became a big barrier thereafter. They require
straight forward exemption rather than exemption by way of refund.
By this humorous
and poetic article above we conclude that the physical condition and mental state
of assesses claiming refunds against export of goods is similar to that of Johnny
in the poem. Every time the assessee is approaching the department his refund claims
are being rejected on some or the other flaws. He has to return fruitless, hopeless
with his futile efforts thinking whether he will be getting the refund or not.
There are a number of services on which the refund is allowed.
The assessee is facing difficulty in almost all of those services due to attached
conditions with each service. Due to the large number of conditions we were not
able to cover all the conditions in this article and hence we will be bringing further
articles on the different conditions covered therein.
Keep visiting for the next article..
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