Refund of Service Tax on certain specified Services

No. CLE/POL/QUERY/2008                                                  
Dec. 24, 2008

Members of the Council.

Sub : Refund of Service Tax on certain specified Services.

Dear Member

As you are aware, the Government of India had announced economic stimulus package for the industry/exporters on December 7, 2008 in view of the current global financial crisis. One of the measures announced was refund of Service Tax on certain specified services to exporters.

Accordingly, the Department of Revenue, Ministry of Finance has issued a Service Tax Notification No.33/2008 dated Dec. 7, 3008, notifying the following.

• Removing the sub-paragraph (e) of paragraph 1 of Service Tax Notification No. 41/2007 (which is the parent notification on exexmption of Service Tax on certain specified services) which states that the Service Tax refund is subject to the condition that "the said goods have been exported without availing drawback of service tax paid on the specified services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995".
• Refund of Service Tax in respect of services provided by an overseas commission agent, as per actual amount of Service Tax paid or Service Tax calculated on 10% of FOB value of export goods, whichever is less.

The various Service Tax Notifications issued by the Department of Revenue exempting the specified services, which also contain the conditions and procedure for claiming refund are enclosed at Annexure I.

Members may however note that as per conditions stipulated in Service Tax Notification No. 41/2007 (which is the parent notification on Service Tax exemption) , the exemption claimed by the exporter shall be provided by way of refund of service tax paid on the specified services used for export of the said goods.

The amendments made in respect of claiming refund of Service Tax are given in Service Tax Circulars No.101/4/2008-ST dated May 12, 2008 and No.106/9/2008-ST dated December 11, 2008, which are enclosed herewith at Annexure - II .

Member exporters may kindly note the above and avail the Serivce Tax refund benefits accordingly.

With regards

ALI AHMED KHAN
Executive Director
COUNCIL FOR LEATHER EXPORTS

  Annexure I

Annexure II