Service Tax refund for exporters – New scheme announced
2nd January, 2012
The Ministry of Finance, India, with the idea of granting quick and automatic refund of Service Tax to exporters, has announced a new scheme to expedite the process. Earlier this year, the Finance Minister had stated that a new scheme on the lines of drawback would be placed to speed up refunds.
Refund of Service Tax relating to services availed by the exporters while manufacturing and exporting their goods has been, for a period of time, debated before every fora and over the years, a number of solutions, to make the refund quicker and without any hassles have also come up.
As per the latest simplified scheme for electronic refund of Service Tax under Notification No. 52/2011-S.T., dated 30th Dec. 2011 and as earlier clarified by Circular No. 149/18/2011, dated 16-12-2011, exporters can either opt for electronic refund through ICES system, which is based on the ‘schedule of rates’ as specified for goods or their class, or opt for refund on the basis of documents, by approaching the Central Excise/Service Tax offices.
To obtain refund electronically, exporters need to have a customs-registered bank account and they have to declare their intention of availing such refund while presenting their goods for export. Chapter heading / subheading as appearing in the “schedule of rates” is also to be mentioned in the shipping bill. The new scheme and schedule of rates notified are effective from 3rd January, 2012. Refund, however, continues to be restricted to specified 18 taxable services as before.