Time Limit for claiming refund under Notification 41/2007 ST dated 6.10.2007 - Please clarify clarification

Dear Sir,

As per the said Notn. No.41/2007 payment of service tax is also the criteria. In the below situation what wld be the action.

if the export of goods was in Feb'08 then the qtr ending wld be March'08 the six month period wld end in Aug'08, but the payment of Service Tax for services rendered against the export of goods in Feb'08 was only made in Sept'08, hence will it be treated as time barred or the time limit of 6 mths frm the qtr ending Sept'08 be applicable.

In my opinion irrespective of the above the claim has to be allowed by way of refund or by taking cenvat credit, since duties and taxes cannot be exported. but "Government ke saath kaun panga lega" since the dept wld not refund neither allow cenvat credit just to satisfy their revenue targets and be in the good books of the Ministry.

Vijay Vora 19/08/2009

 

I think you are stretching this too far. The relevant date for claim of refund is to be computed in terms of this notification as six months from the end of the relevant quarter and payment of service tax by the service provider has nothing to do with the relevant date.

You must be aware that a service provider shall pay his service tax only after the recipient pays him the value of taxable service and the ST thereon. But he would have raised his invoice immediately after provision of service to the recipient i.e. the exporter and such invoice indicating the relevant details including the ST element is sufficient enough for claim of refund.

Under this Notification, there is no requirement for the service provider to pay service tax and only thereafter the recipient would be eligible to claim refund. This is not the intention of the notification and such a condition is also ridiculous.

If any officer in the field formation insists on this, you have the liberty of reporting the name of such officer to Joint Secretary (TRU) i/c of Service Tax in the Finance Ministry/CBEC so that such officer can be taken to task for imposing such ridiculous conditions on the exporters claiming refund of service tax.

santosh hatwar 19/08/2009

 

Kind Attn: Mr. Mandrake

Sir, one of the main condition for claiming the refund under the notification 41/2007-ST is,

"(c) the exporter claiming the exemption has actually paid the service tax on the specified services"

So, the service charges and service tax thereon are requiered to be paid to the service provider before claiming the refund under this notification.

Kiran

Soman Nair 19/08/2009

 

Dear Mr. Kiran,

I am aware of that provision and my response was specifically to the issue of payment of service tax by the service provider and its relevancy for the limitation period. Because the service provider will be discharging his tax liability only after he receives his dues from the recipient [Rule 6(1) of STR, 94]. I gave my response from the point of view of service provider paying his service tax dues.

It is pretty obvious that the recipient has to clear his dues to the service provider before he claims his refund and there is no quarrel in this regard. That is probably the reason why a time frame of one quarter is given in the notification and six months from the ending of such quarter is the limitation period for filing the claim.

Now if the query is with regard to a recipient discharging his dues to the service provider after six months (if that is what the querist meant when he said payments made in sept 08 for services received for exports in feb 08) then the recipients should know that they cannot have the cake and eat it too.

santosh hatwar 19/08/2009