The Finance Ministry on Monday made the first ever move to refund service tax paid by exporters on non-input services. The refund will now be available on four identified transport and port services that could be linked to export goods. Services offered to exporters by major ports, minor ports, road transport services provided by a goods transport agency from inland container depot (ICD) to port of export and transport of export goods in containers by rail from ICD to port of export would now qualify for service tax refund. The refund on certain services came nearly five months after the Commerce and Industry Minister, Mr Kamal Nath, announced service tax exemption on services rendered abroad and charged on exports from India. He had also assured exporters that tax on services rendered in India and utilised by exporters would be exempted or remitted. Official sources said that the four taxable services have been identified by the Finance Ministry and that the Commerce Ministry was yet to come up with a list of services or a simple and verifiable method to evaluate linkage of services with goods exported.Reacting to the Finance Ministry’s decision, the Federation of Indian Export Organisation described the move as a “half-hearted” measure as a number of services used by exporters have been left out. It was pointed out that there was still no relief on service tax paid on foreign agents, overseas travel, participation in trade fairs, banking services and fees paid to professionals.
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