My client is an exporter of Information Technology Services. Finance Act, 2008, w.e.f 16.05.2008,
made IT services subject to service tax levy. Shall the exporter of IT services can register
now under service tax act and can claim rebate of service tax paid on input services like,
Rent on immovable property, telephone etc.? He is not liable to pay service tax on his output
services since the export of service rules,2005 has been complied. Kindly resolve this issue.
SIDDHARTHA SANKAR ROY
(Government Servant -MOF)
(868 Points)
Replied 09 January 2009
At present nineteen categories of taxable services which are used by an exporter for export of goods have been allowed to be refunded. These services are :
1.Services provided to an exporter by the insurer, including a reinsures carrying on general insurance business.
2.Services provided a port or any person authorized by a port in relation to port services in any manner.
3.Services provided by a technical testing and analysis agency in relation to technical testing and analysis of said goods where technical testing and analysis is required to be undertaken as per the written agreement between the exporter and the buyer of the export goods.
4.Services provided by an inspection and certification agency in relation to inspection and certification of the export goods where such inspection and certification is required to be undertaken as per the written agreement between the exporter and the buyer of the export goods.
5.Services provided other port or any person authorized by that port in relation to port services in any manner.
6.Services provided by a Goods Transport Agency for transport of export goods from the inland container depot to the port of export.
7.Services provided by any person other than Government Railways, in relation totransport of exportgoods in containers by rail in any manner from inland container depot to the port of export.
8.Specialized cleaning services namely disinfecting, exterminating, sterilizing or fumigating of containers used for export of said goods provided to an exporter.
9.Services provided for storage and warehousing of said goods.
10.Services provided by a courier agency to an exporter in relation to transportation of time-sensitive documents, goods or articles relating to export, to a destination outside India.
11.Services provided to an exporter in relation to transport of export goods by a Goods Transport Agency directly from the place of removal, to inland container depot or pot or airport, as the case may be, from where the goods are exported.
12.Services provided to an exporter by any person other than Government Railways, in relation totransport of exportgoods in containers by rail in any manner in relation to transport of export goods directly from the place of removal, to inland container depot or pot or airport, as the case may be, from where the goods are exported.
13.Services provide by a custom house agent in relation to export goods by the exporter.
14.Services provided or to be provided to an exporter, by a banking company or a financial institution including a non-banking financial company, or any other body corporate or commercial concern in relation to
(i)Collection of export bills.
(ii)Letter of credit such as advising commission, advising amendment, confirmation charges .
15.Services provided by a commission agent, located outside India, and engaged under a contract or agreement or any other agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him.
16.Services of purchase or sale of foreign currency, including money changing provided to an exporter in relation to export of goods by a banking company or a financial institution including a non-banking financial company, or any other body corporate or commercial concern.
17.Services of purchase of sale of foreign currency, including money changing provided to an exporter in relation to export of goods by a foreign exchange broker, including an authorized dealer in foreign exchange or an authorized money changer, other than a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern.
18.Services of supply of tangible goods for use, without transferring right of possession and effective control of tangible goods, provided to an exporter in relation to goods exported by the exporter.
19.services provided by a clearing and forwarding agent in relation to export goods exported by the exporter.
The conditions for claiming refund of service tax paid on the above services are:
a.the specified services are received and used by the exporter for the export of the said goods;
b.the exporter claiming the exemption has actually paid the service tax on the above mentioned services;
c.no CENVAT credit of Service Tax paid on the specified services used for export of said goods has been taken under the CENVAT Credit Rules, 2004;
d.the said goods have been exported without availing drawback of service tax on the above mentioned services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995;
e.themanufacturer exporters shall file the refund claimwith the Assistant Commissioner or Deputy Commissioner of Central Excise of Central Excise as the case may be having jurisdiction over the factory of manufacture or warehouse.
f.the merchant exporters shall file the refund claim with the Assistant Commissioner orDeputy Commissioner of Central Excise, as the case may be having jurisdiction over the registered office or the head office, as the case may be, of such exporter.
g.the exporter who is not registered as an assessee underCentral Excise Registration or Service Tax registration may apply to the concerned Assistant Commissioner of Concerned Service Tax/Central Excise Division.
h. The refund claims should be filed on quarterly basis within six months form the end of such quarter.
Thanks for the reply sir. But sir, as per Noftn. No.12/2005, an exporter of output services can claim rebate of service tax paid on input services provided his output services are listed in any three categories as per Rule 3 of Export of Service Rules,2005. When I have checked the rules, IT services [brought in to service tax levy by Fin. Act, 2008] is not listed in any of the category of Rule 3. Even the other new services like Stock Exc & Clearing & Processing services which are brought in to service tax net by Fin. Act, 2008 has been listed in the Rule 3. But IT services are excluded. Now in this situation can an exporter of IT services claim so?
For quick reference please visit "https://www.ieport.com/service_tax/notifications/notfns-2k5/st12-2k5.htm"
SIDDHARTHA SANKAR ROY
(Government Servant -MOF)
(868 Points)
Replied 13 January 2009
Actually I didinot read your query properly. Your query was whether newly introduced IT services is included in the three lists prescribed in Rule 3 of Eport of Services Rules 2005 to qulify for reabate under Notification 12/2005-ST 19.04.2005.
If you read Rule 3(iii) of Export of Services Rules,2005, it includes IT service also.The procedure as described by me earlier covers situtation only when goods are exproted out of india and the exporters seek refund of taxabel services attributable to the exprot.
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