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Service Tax Refund for Export of Services

Jimmy (CA ) (75 Points)

16 July 2009

Can refund be obtained for Service Tax input if company is engaged export of services...?

Regards,

Jimmy Chauhan

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11 Replies

CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 16 July 2009

yes.. Refer notification 12/2005 dt 19.04.05 as amended and rule 5 of CENVAT credit rules

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 16 July 2009

Export of taxable services only are eligible for refund/ rebate. Not 11/2005 appears to be a reasonable option in addtion to ones mentioned by Shilpi.

CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 16 July 2009

Notification 11/2005 provides for refund or rebate of ST paid on the output services where the same are exported in terms of rule 3 of export of service rules.

Notification 12/2005 provides for the refund or rebate of ST paid on inputs used in the export of taxable services.

Sushma Mevacha (Executive) (394 Points)
Replied 16 July 2009

I think it is Notification No. 40/2007-ST dated 17.09.2007 provides the refund of the Service Tax paid on the taxbale services. is it correct?

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CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 16 July 2009

Notification 40/2007 applies to exporter of goods. the question raised here is wrt exporter of services.

Notification 41/2007 supersedes Not. 40/2007 and Not 17/2009 supersedes Not 41/2007.

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Sushma Mevacha (Executive) (394 Points)
Replied 16 July 2009

is here the company is engaged export of services but the company is not exporter.. right?

CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 16 July 2009

the entity provides services which are export as per rule 3 of the export of services rules.

It is services and not goods that are exported in the instant case

Dilip Darji (392 Points)
Replied 16 July 2009

Dear Sir.

As per Rule 5 of Export of Services Rules, 2005, where any taxable service is exported, (1) rebate of service tax paid on export of taxable service (Noti.No.11/2005) (2) service tax or duty paid on inputs services or input (Noti.No.12/2005) , used in providing taxable services, can be claimed, subject to following the procedure prescribed under the relevant Notification. For this purpose the Services must be taxable. The procedure under Noti.No.12/2005 is complicated.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 19 July 2009

Normally 11/2005 should be easier. Under central excise the claim of rebate on duty paid has been found tobe simpler and easier for proving since the input corelation is not necessary.

However the Govt should decide to allow refunds only then exporters of servcies will get the same.

Partha P Paul (Asst Mgr) (25 Points)
Replied 05 April 2010

Hi,

Need help On the following Service Tax issue.

Our Co is primarly in trading. Selling Imported goods thru dealers/distributors.

We are providing one off service to our Corporate which we would like to invoice them with service tax under "Business Auxillary Services"

Inputs for this service involve expenses like rent,travel exp etc. for which we are paying Service Tax.

We have no Other Service TAx issue and filling NIL return.

We wish to charge service tax ,pay to govt and claim refund/rebate.

Is this possible?

P Paul

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Sreejith.R (CA student) (37 Points)
Replied 02 August 2010

As per Cenvat Credit Rules,you will get reund in respect of duty paid on input goods & service tax paid on input services used for providing services to your Corporate. The condition is that the Input gods and input services are directly relating to output service provided. It is not clear from your question that service provided to the corporate is a export service or not.