Service Tax Circular No. 106/2008 - Filing of claim for refund of ST paid under noti 47/2007-ST

economic growth slows to 6.9 per cent US closes its embassy in Syria Sudha Sharma appointed as Member of CBDT Rupee hits a high of 48.73 against Dollar Laxman Das is Officiating Chairman of CBDT Tariff Value for import of gold is 556 & for silver 1067 & for Brass Scrap 4078 & for poppy seeds 2205-Customs Non-Tariff Notification No. 10 Fused Silica is classifiable under Tariff Item 32074000-Customs Circular No.3 Additional Commisssioner of Income Tax HA Siddiqui sentenced to 4 years imprisonment for accepting bribe of Rs 1 Lakh by CBI Court in Delhi HC upholds levy of service tax on booking of flats-The explanation which was inserted by the Finance Act of 2010 clearly brings within the fold of taxable service a construction service provided by the builder to a buyer where there is an intended sale between the parties whether before, during or after construction Authority for Advance Ruling rules super concentrates shall be classified as products of the chemical industry under heading 3824 90 90 of Customs Tariff Anti dumping duty imposed on import of Morpholine from China European Union & USA Anti dumping duty imposed on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms from Refund of Anti-Dumping Duty (Paid in Excess of Actual Margin of Dumping) Rules, 2012 notified-Customs Non-Tariff Notification No.5 Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Amendment Rules, 2012-Customs Non-Tariff Notification No.6 Safeguard duty at the rate of 10% ad valorem notified on import of Phthalic anhydride, falling under tariff item 2917 35 00-Customs SG Notification No.1 Customs duty on import of Gold, Silver, Cut & Polished Diamonds hiked Customs duty to be charged at the rate of 2 per cent of Tariff Value on gold and 6 per cent of Tariff Value on silver Tariff Value for import of gold & silver notified-Customs Non-Tariff Notification No.3 Anti-dumping duty on imports ofSilk fabrics 20-100 gms per metre, falling under heading 5007 originating in, or exported from, China-CustomsTariff Notification No. 2 Anti-dumping duty imposed on imports of Nylon Filament Yarn, falling under Chapter 54 ,originating in, or exported from, China, Chinese Taipei, Malaysia, Thailand and Korea RP-Customs TariffNotification No.3 Anti-dumping duty imposed on import of Phosphoric Acid of allgrades and all concentrations (excluding Agriculture/Fertilizer Grade) ,falling under tariff item 28092010, originating in, or exported from, Israel and Taiwan-Customs Tariff Notification No.4 Anti-dumping duty on imports of Cellophane Transparent Film , falling under Chapter 39 , originating in, or exported from, China-Customs TariffNotification No.5 Anti-dumping duty onimports of Saccharin, falling under Chapters 29, 30, 33 and 38 ,originating in, or exported from, China-Customs Tariff Notification No.7 Special Bench of ITAT rules the appellant is not entitled to set off carry forward business loss against the long term capital gain arising on sale of land used for the purpose business ITAT rules Long Term and Short Term gains / losses on sale of equity shares under Portfolio Management Scheme is business income and not Capital Gains HC rules the opinion of the AO may have been legally erroneous but this cannot be a ground for initiation of re-assessment proceedings Anti-dumping duty on ‘Caustic Soda’, originating in, or exported from, Saudi Arabia, Iran, Japan, USA & France-Customs Tariff Notification No.1 Cost Accountants can issue Certificates for the purpose of refund of 4% CVD-Customs Circular No.1 Customs duty on import from ASEAN nations lowered- Customs Tariff Notification No.127 deeper tariff cut on import from Malaysia notified- Customs Tariff Notification No.128 deeper tariff cuts on import from Korea notified- Customs Tariff Notification No.123 deeper tariff cuts on import from Srilanka & Pakistan under SAFTA notified- Customs Tariff Notification No.125 Schedule of Rates for Service Tax Refund to Exporters notified in supersession of Notification No.17/2009-Service Tax Notification No. 52 Customs duty on import of several products from specified countries lowered-Customs Tariff Notification No.113 Anti-dumping duty on ‘Sodium Hydrosulphite (SHS)’, falling under headings 2831 and 2832 , originating in, or exported from, China PR- Customs Tariff Notification No.111 CBEC specifies documents required for Registration of ServiceTax Customs duty on import of 532 Products from Singapore lowered-many products exempted from duty-Customs Tariff Notification No. 106 Government allows Rebate of excise duty on export of goods to Nepal under ARE-1 Procedure w.e.f. 1st March 2012-Central Excise Non-Tariff Notification No.24

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Circular No. 106 /9 /2008-ST

F.No.137/84/2008-CX.4

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Excise & Customs)

New Delhi, dated the 11th December, 08

Sub:- Filing of claim for refund of service tax paid under notification No. 41/2007-ST dated 6/10/2007 – reg.

Notification No. 41/2007-ST, dated 6/10/2007 allows refund of service tax paid on specified services used for export of goods. The Board has from time to time examined the procedural difficulties arising in implementation of this refund scheme. In this context, a circular (No. 101/4/2008-ST, dated 12.5.2008) was issued earlier whereby the procedural difficulties that were being faced by the merchant exporters and the exporters having multi location offices were resolved. Subsequently, notification No. 32/2008-ST, dated 18.11.2008 has also been issued to (i) extend the period of filing of refund claim by the exporter from 60 days to six month and from the end of the quarter to which such refund claim pertains; and (ii) allow refund on testing service, without any copy of agreement with the buyer of goods, if such testing and analysis is statutorily stipulated by domestic rules and regulations.

2. The Board has received further references from field formations and trade seeking clarification on other procedural issues. Trade has also reported delays in sanction of refund claims. These issues and the clarification for streamlining of procedures are discussed below.

3. ISSUE No. I: The procedure for availing refund, under the aforesaid notification, by a manufacturer exporter not registered with central excise is as under:

(i)

He shall file the claim with the central excise authority having jurisdiction the over factory of manufacture [para 2 (b)(i) of the notification];

(ii)

He shall file a declaration in the format given in the annexure to the notification. The CX authority would issue a STC No. (Service Tax Code) to him [para 2 (c) and 2(d) of the notification].

The issue raised by some of the exclusive Central Excise Commissionerates is that they do not have access to the System for Allotment of Service Tax Payer Code (SAPS). Hence, exclusive Central Excise Commissionerates in places like Delhi and Bangalore have not been able to process the refund claims filed by the manufacturer exporter not registered with central excise.

CLARIFICATION: The Directorate of Systems has reported that there is no restriction for exclusive Central Excise Commissionerates in having access to SAPS. Therefore, exclusive Central Excise Commissionerates, not having access to SAPS at the moment, may approach the Directorate of Systems to get the access to the centralized software.

4. ISSUE NO. II: One of the conditions of the notification is that the exporter claiming exemption has actually paid the service tax on the specified services [para 1(c) of the notification]. The other condition is that the refund claim shall be accompanied by document evidencing payment of service tax [para 2(f) (ii) of the notification]. In this regard the following issues have been raised.

(i) Whether the invoices/bills/challan issued by the service provider, showing service tax amount could be treated as evidence that the exporter has paid the service tax.

(ii) The invoices produced by the exporters are at times not complete (i.e. does not have STC code of service provider)

(iii) One to one correlation between payment of ST and invoice is difficult in many cases.

CLARIFICATION: The invoices/challans/bills issued by supplier of taxable service, in conformity with rule 4A of the Service Tax Rules, 1994, are reasonable evidence that the services on which refund is being sought are taxable service. The compliance of condition that exporter has actually paid the service tax rests with the exporter claiming refund. Therefore, in so far as this condition is concerned, the refund claim should be processed based on furnishing of appropriate invoices/ bills/ challan by the person claiming refund and undertaking to the effect of payment of service tax by him. For the purposes of compliance verification, random checks should be carried out independently and where the refund amount is significant, post refund audit may also be carried out.

As regards incomplete invoices/bills etc,., rule 4A of the Service Tax Rules, 1994 prescribes the statutory requirement. Compliance of this rule requires that the invoices/challan/bills should be complete in all respect. Therefore, the exporter claiming refund of service tax under notification No. 41/2007-ST should ensure in their own interest that invoices/bills/challan should contain requisite details (name, address and registration No. of service provider, S. No. and date of invoice, name and address of service receiver, description, classification and value of taxable service and the service tax payable thereon). Refund claim cannot be allowed on the basis of invoices not having complete details as required verification cannot be carried out by the department on the basis of incomplete invoices.

5. ISSUE NO. III: Vide instruction F. No. 341/15/2007-TRU, dated 17.4.2008, direction has been issued that refund claim be disposed of within thirty days. Commissioners have stated that it is not practically feasible in all cases to dispose of the refund claim within this time frame in view of procedural and other issues involved in processing of claim.

CLARIFICATION: The difficulties arising in processing of claims may be brought to the notice of the Board. The procedural difficulties brought so far to the notice of the Board have been clarified earlier vide circular No. 101/4/2008-ST, dated 12.5.2008 and vide this circular. This should enable the field formations to dispose of the pending refund claims expeditiously. Therefore, every effort should be made by field formations to adhere to the prescribed timelines.

The Board has further decided that simplified procedure for refund, as prescribed by the Board vide circular No. 828/5/2006-CX dated 20.4.2006 for sanction of refund/rebate of unutilized CENVAT credit under rule 5 of the CENVAT Credit Rules, 2004/rebate would mutatis mutandis apply to refund claims under notification No. 41/2007-ST. Under this simplified procedure, 80% of the due refund amount is sanctioned as adhoc interim refund to specified category of exporters having good track record, within 15 days of filing of a refund claim, subject to the condition that refund claim is complete and contains the requisite documents. For this purpose, the specified category of exporters would be (i) all exporters having export turnover of more than Rs 5 crore in the current or preceding financial year; (ii) PSUs including PSUs of State Governments; (iii) Star Export Houses as specified under Chapter 3.5 of the Foreign Trade Policy, 2004-2009; (iv) manufacturer-exporters registered with Central Excise who have been exporting during the previous two financial years and have minimum export of Rs. 1 crore or more during the preceding financial year. (v) exporters registered with service tax or central excise who have paid central excise duty and/or service tax amounting to Rs. 1 crore or more during the preceding financial year; (vi) All Export Oriented Units.

6. Wide publicity may be given (in the form of trade notices, advertisements) to make the stakeholders aware of the above clarification and compliance should be monitored. Any difficulty faced in processing of refund claims under aforesaid notification may be immediately brought to the notice of the undersigned.

Yours faithfully,

(Gautam Bhattachraya)
Commissioner (ST)