Monday, January 12, 2009
 Apna Money
Taxation
Services without tax


The list of exemptions granted to exporters has been expanded since the four services excluded on 17 September 2007

Exemption from service tax was initially granted on 17 September 2007 for four services received by an exporter of goods who used certain specified services during the course of exports. Later, this was superseded by another notification dated 6 October 2007 to extend the benefit of exemption to seven services including the four services covered earlier, subject to certain conditions. Still later, notifications were issued on 29 November 2007, 19 February 2008, 1 April 2008 and 10 May 2008 to grant similar exemption to some more services.

The service provider must collect the service tax from the service receiver and remit it to the government account. Thereafter, the service receiver can claim refund of tax so paid. The one exceptional situation to this requirement is if the service receiver is the person liable to pay service tax (as in the case of transport of goods by road service where the consignor or consignee is one of persons specified). Here, the service receiver must directly pay the tax to the government account and thereafter apply for refund. /p>

Account opening charges ranged between Rs 100-Rs 500 per account. However, its abolition may not have much impact as most DPs anyway did not levy any account opening charges.

Under notifications issued on 17 September 2007 and on 6 October 2007, exemption from service tax was available to exporters on the following services: General insurance service, and other port services including port services, technical inspection and certification service, technical testing and analysis service, transport of goods by road and transport of goods in containers by rail from inland container depot to the port of export.

To claim exemption under this notification, the exporter should have actually paid service tax on the specified services to the service provider.

From 19 February 2008, an exporter may claim exemption for transport of export goods directly from the place of removal, to inland container depot or port or airport from where the goods are exported.

Conditions to be satisfied for claiming exemption include:

* Export goods are transported directly from the place of removal to inland container depot or port or airport from where the goods are exported. * Invoice issued by the exporter for export goods should indicate the name of the inland container depot or port or airport from where the goods are exported. * Details of exporterís invoice on export goods are specifically mentioned in the lorry receipt and the corresponding shipping bill. * Declaration in the refund claim if such service has been received from the said service provider for purposes other than for export.

Cenvat credit can be used to pay excise duty if any payable at the time of export or to pay service tax on output service. On the other hand, refund can be claimed for the service tax paid on specified services provided no Cenvat credit is taken. Rule 5 states where Cenvat credit cannot be claimed, refund can be claimed as per notification.

The claim for refund has to be filed on a quarterly basis, within 60 days from the end of the relevant quarter during which the said goods have been exported. The goods are deemed to have been exported on the date on which the proper officer of customs makes an order permitting clearance and loading of the goods for export under Section 51 of the Customs Act, 1962. A quarter means the period 1 January to 31 March, or 1 April to 30 June, or 1 July to 30 September, or 1 October to 31 December of a financial year.

 

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