Service tax refunds for Garments Exporters

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2009
Please clarify the following :

1. We are garments exporters whether we have to pay GTA Service tax or exempted.

2. Please confirm Whether service tax is applicable for foreign agency commission or not.

Please reply the following mail ID
accounts@premgroups.org

ANIL JANGID

ANIL JANGID (Expert)
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21 November 2009 (1)Yes you have to pay GTA Service tax.
(2)service tax applicable if service provide in india.When the services are provided outside India, provisions of service tax is not applicable.

Sunil

Sunil (Expert)
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22 November 2009 2) Service Tax is applicable on foreign agency commission if provided outside India but used for business in India.

In both cases, you have to pay service tax and claim refund. For the GTA service you may be allowed full refund to the extent of service tax paid. For the commission agency you are allowed refund of only the amount you paid as service tax or service tax calculated on 2% of FOB value realised, whichever lower.

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Querist : Anonymous

Querist : Anonymous (Querist)

23 November 2009 Thanks, kindly confirm that service tax rate on foreign agency commission payment increased from 2% to 10% for refund.

regards
k.kaleeswaran

Sunil

Sunil (Expert)
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23 November 2009 Recently I have read the notification for obtaining the waiver of payment for service tax. Basically it states that if you are registered with an EPC you can apply to the central excise for waiver provided your service tax does not exceed 1% of FOB Value. It is not clear whether service tax on 1% of value or service tax amount of 1%. If it is the latter then the rate would be 10%.

People were having problems while applying for waiver as they were being shunted between excise and service tax departments. I have not yet come across any waiver being granted but you can try.