Friday, April 2, 2010

120/01/2010-ST, Dated: 19/01/2010

Subject: Problems faced by exporters in availing refund of excess credit – regarding
CENVAT Credit Rules, 2004 permit taking of credit of inputs and input services which are used for providing output services or output goods. In order to zero-rate the exports, Rule 5 of CENVAT Credit Rules, 2004 provides that such accumulated credit can be refunded to the exporter subject to stipulated conditions. Notification No. 5/2006-CE (NT) dated 14.03.2006 provides the conditions, safeguards and limitations for obtaining refund of such credit.
2. It has been represented by the exporters of services (mainly the call centres or the BPOs) that they are facing difficulties in getting refund under the said notification. In order to ascertain the causes for such delay a number of meetings were held with the refund sanctioning authorities. During these meetings the officers pointed out the following legal/procedural impediments partly responsible for such delays:readmore

119/13/2009-ST, Dated: 21/12/2009

Subject : Service tax valuation issues pertaining to Customs House Agents Service-reg.
Customs House Agent's (CHA) Services are taxable since 15th June 1997. As per the definition (section 65 (105) (h) of the Finance Act, 1994) the 'taxable service' means any service provided or to be provided to any person, by a custom house agent in relation to the entry or departure of conveyance or the import or the export of goods and the term 'service provider' shall be construed accordingly. Further, as per definition appearing under section 65(35) of the aforesaid Act, a 'custom house agent' means a person licensed, temporarily or otherwise, under the regulations made under sub-section (2) of section 146 of the Customs Act, 1962. The Custom House Agents Licensing Regulations, 2004, made under the said section, prescribe the procedure for grant of license by the customs department. They (regulation no. 13) also place obligations on such license holders during their interface with customs department pertaining to customs formalities for conveyance or imported or export goods. In sum, the above provisions read in harmony, show that the activities of a CHA i.e. pertaining to customs formalities in relation to the entry or departure of conveyance or the import or the export of goods, is subjected to service tax under CHA services.readmore

118/12/2009-ST, Dated: 23/11/2009

Subject:   Refund of service tax paid on foreign agent commission by exporters – Notification No.18/2009 dated 07/07/2009 – clarification - Reg.         

            Representations have been received from exporters, seeking clarification whether ten per cent of free on board (FOB) value of export goods  allowed as foreign agency commission vide Notification 41/2007-ST dated 06/10/2007 as amended, has been reduced to one per cent vide Notification 18/2009-ST dated 07/07/2009 . readmore