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Exporters have hailed the move by the finance ministry to extend the service tax refund scheme for exporters to three more services recently.
Speaking to our correspondent Mrs. Malini Srivastava (Director), EMMS Global said, "This is a right move by the government. It was long due because Kamal Nath had in April 2007 announced the same."
"Although it doesn't affect my business, nevertheless at least it will be helpful for certain exporters. Being an exporter myself it is always great to know that something good is happening in our sector," she added.
Earlier, on Tuesday the finance ministry has extended the service tax refund scheme for exporters to three more services, but stopped short of including 14 other areas for a similar relaxation.
With this move, 13 services used by exporters have been made eligible for refund of the tax liability.
With this notification (No. 3/2008-ST), the government has extended the scheme to refund service tax paid by exporters on taxable services, which are not in the nature of input services but could be linked to export of goods, to following three more taxable services:
(i) Services provided by the Goods Transport Agency in relation to transportation of export goods from the place of removal to the actual place of export i.e. inland container depot / port / airport. (Section 65[105][zzp]),
(ii) Services provided in relation to transportation of export goods in containers by rail from the place of removal to the actual place of export i.e. inland container depot / port / airport. (Section 65[105][zzzp])
(iii) Courier Services provided to an exporter in relation to transportation of documents, goods or articles relating to export, to a destination outside India. (Section 65[105][f] of the Finance Act, 1994)
(To be concluded...)
Service tax paid by exporters on input services used for export goods is neutralised under various existing schemes. Refund of service tax paid on taxable services, which are not “input services” but could be attributable to export of goods is presently available to ten taxable services:
(i) Port Services provided for export. (Section 65[105][zn])
(ii) Other port Services provide for export. (Section 65[105][zzl])
(iii) Services of transport of goods by road from ICD to port of export provided by Goods Transport Agency. (Section 65[105][zzp])
(iv) Services of transport of export goods in containers by rail from ICD to port of export. (Section 65[105][zzzp])
(v) General Insurance Services provided to an exporter in relation to insurance of export goods. (Section 65[105][d])
(vi) Technical testing and Analysis Agency Services in relation to technical testing and analysis of export goods. (Section 65[105][zzh])
(vii) Inspection and Certification Agency Services in relation to inspection and certification of export goods. (Section 65[105][zzi])
(viii) Storage and warehousing service [section 65(105)(zza)]
(ix) Cleaning activity service [section 65(105)(zzzd)]
(x) Business exhibition service [section 65(015)(zzo)].
This relaxation on service tax, which account for up to five percent of the freight-on-board (FoB) value of export consignments, is aimed at cushioning losses of exporters hit by the 12 percent annual appreciation in the rupee.
Commerce Minister Kamal Nath had earlier announced the exemption and refund of service tax for exporters while releasing the annual supplement to the trade policy in April, 2007.
The finance ministry has made 10 services eligible for service tax refund in announcements made in July, October and November as part of export relief packages. These include service tax paid on port, general insurance and business exhibition services.
(Concluded...)
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