July 7, 2021 / Indirect Tax

PROCEDURE OF REFUND OF SERVICE TAX PAID ON INPUT SERVICES FOR EXPORT OF SERVICES

Conditions and Limitations:-

Service has been exported in terms of Rule 6A*
Duty on the inputs, rebate of which has been claimed, has been paid to the supplier
Service tax and cess, rebate of which has been claimed, have been paid on the input services to the provider of service
Total amount of rebate of duty, service tax and cess admissible is not less than one thousand rupees
No CENVAT credit has been availed of on inputs and input services on which rebate has been claimed

Procedure:-

1) Filing of Declaration:-

The provider of service to be exported shall, prior to date of export of service, file a declaration with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, specifying the service intended to be exported with:-

Description, quantity, value, rate of duty and the amount of duty payable on inputs actually required to be used in providing service to be exported;
Description, value and the amount of service tax and cess payable on input services actually required to be used in providing service to be exported.

2) Verification of declaration:-

The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall verify the correctness of the declaration filed prior to such export of service, if necessary, by calling for any relevant information or samples of inputs and if after such verification, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise is satisfied that there is no likelihood of evasion of duty, or as the case may be, service tax and cess, he may accept the declaration.

3) Procurement of input materials and receipt of input services:-

The provider of service to be exported shall:-

Obtain the inputs required for use in providing service to be exported, directly from a registered factory or from a dealer registered for the purposes of the CENVAT Credit Rules, 2004 accompanied by invoices issued under the Central Excise Rules, 2002;
Receive the input services required for use in providing service to be exported and an invoice, a bill or, as the case may be, a challan issued under the provisions of Service Tax Rules, 1994

4) Presentation of claim for rebate:-

Claim of rebate of the duty paid on the inputs or the service tax and cess paid on input services shall be filed with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, after the service has been exported;

Such application shall be accompanied by:-

Invoices for inputs issued under the Central Excise Rules, 2002 and invoice, a bill, or as the case may be, a challan for input services issued under the Service Tax Rules, 1994, in respect of which rebate is claimed;
Documentary evidence of receipt of payment against service exported, payment of duty on inputs and service tax and cess on input services used for providing service exported, rebate of which is claimed;

A declaration that such service, has been exported in terms of rule 6A of the said rules, along with documents evidencing such export.

The jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, having regard to the declaration, if satisfied that the claim is in order, shall sanction the rebate either in whole or in part.

Rule 6A: Export of Services:-

The provision of any service provided or agreed to be provided shall be treated as export of service when:-

The provider of service is located in the taxable territory,
The recipient of the service is located outside India,
The service is not a service specified in the section 66D of the Act,
The place of provision of the service is outside India,
The payment for such services has been received by the provider of service in convertible foreign exchange, and

The provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 3 of clause (44) of section 65B of the Act.

Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing suchservice and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.

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