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Service tax refund on gta services

Sachin j Vatsal (CA, CS, DISA) (67 Points)

16 November 2011

Dear all,

Here is an interesting issue i'm dealing with in my pvt ltd company. My company is exporting cotton bales to many countries. It pays Transportation charges to GTA for sending goods upto port. Simultaniously company being registered entity is laible to pay Service tax on GTA services (S.65(105)zzp), hence it pays service tax to govt.

Now can this Service tax paid by company on GTA Services, be refunded to the company on account of Export of goods.

Pls. pay attention that GTA Service is not covered under Notification 17/2009 Dtd. 07-07-2009.

Hope I could have communicated the situation.

Regards

CA. Sachin j Vatsal.

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7 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 17 November 2011

GTA service up to port is exempted subject to filing of EXP-1. Since refund scheme is specific to certain services, refund of tax under GTA may be difficult.

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Sachin j Vatsal (CA, CS, DISA) (67 Points)
Replied 18 November 2011

Dear Nair Sir,

Thank You Very much for discussing Qrery.

Further, if Refund is difficult, then can company avail Cenvat Credit on Service Tax Paid ? and subsquently get refund under Rule-5 of Cenvat Credit Rules, 2004 ?

Thanks in advance for your reply.

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 18 November 2011

GTA service only up to place of removal is input service, but this applies to manufacturer exporter only. If the price is FOB , you take risk of transportation up to port and ownership of goods lies with you up to port, then there is possibility to argue that your place of removal is port. Still it is denatable.

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Sachin j Vatsal (CA, CS, DISA) (67 Points)
Replied 18 November 2011

But Sir,

We are not manufacturer, we just purchase row cotton and convert that into bales after Ginning & Pressing activity then export. But if We can't take Cenvat Credit it means company will bear service tax. So what else remedy is there ?

Thank You Very Much for your quick reply.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 18 November 2011

refund of non cenvat cases, and especially GTA on exports, you have to submit heaps of recrods to department for each consignment exported and claim refund, procedure of refund is same as like rebate of excise paid on exported goods,

as the amount is negligible its better to book the service tax under expenses, otherwise the stationary expenses, travelling expeneses, would get shooted to the level of rebate claimed

please read table of the link sl no 6 and 7, where GTA is included for refund with certain conditions

https://indiabudget.nic.in/ub2009-10/cen/st1709.pdf

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Sachin j Vatsal (CA, CS, DISA) (67 Points)
Replied 19 November 2011

Thank You U S Sharna Sir,

It is clearly written at S. No. 6 of Notification No. 17/2009 that ST on GTA will be refunded to exporters.

Do we need to claim refund for each consignment seperately or for all consignments within a period of 1 Year ?

Thank You in Advance for Your reply.