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Export

Export. &. Refund Claim. Type of Refunds. In case of Export of Services In case of Export of Goods For SEZ Units/developers Refund under Rule 5B of CENVAT Credit Rules Refund of excess/wrong Service Tax Paid. Topic To Be Discussed. Export of Service.

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  1. Export & Refund Claim By CA Atul Gupta

  2. Type of Refunds • In case of Export of Services • In case of Export of Goods • For SEZ Units/developers • Refund under Rule 5B of CENVAT Credit Rules • Refund of excess/wrong Service Tax Paid. By CA Jai Prakash Aggarwal

  3. Topic To Be Discussed By CA Atul Gupta

  4. Export of Service • Provider of Service is located in Taxable Territory; • Recipient of Service is located outside India; • Service should not be covered under Negative List; • Place of Provision of Service is outside India; • Payment for such service has been received by the provider of service in convertible foreign exchange. By CA Atul Gupta

  5. Who can File Refund Claim • A service provider; • Who provides an output service which is Exported; • Without payment of service tax; • Subject to safeguard, conditions & limitations. By CA Atul Gupta

  6. Frequency of Refund Claim • As per Notification No 27/2012 C.E. (NT) dated 18.06.2012 refund claim shall be filed quarterly; • Quarter means a period of three consecutive month starting from 1st April of every year & onwards; By CA Atul Gupta

  7. Quantum of Refund Claim • As per Rule-5 of CENVAT Credit Rules, 2004 read with Notification No 27/2012 C.E. (NT) dated 18.06.2012 the amount of refund claim may be calculated as under: Refund Amount = Export Turnover of Services*Net Cenvat Credit Total Turnover • Net Cenvat Credit = Total CENVAT credit availed on input services by the output service provider during the relevant period; • Export Turnover of Services = Payment received during the relevant period for export of services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period – advance received for export services for which the provision of services has not been completed during the relevant period; • Total Turnover = Total Value of Export Turnover of services as determined above and the value of all other services, during the relevant period By CA Atul Gupta

  8. Time Limit for Filing Refund Claim • As per NN 27/2012 – CE (NT) a refund claim shall be filed: • Within one year; • From relevant date; • As provided in Section – 11B of Central Excise Act, 1944; Relevant Date shall be date of export of service. By CA Atul Gupta

  9. Where to be Filed • As per Rule – 5 read with NN 27/2012 – CE (NT) a refund claim shall be filed: • With AC/DC of Service Tax; • having jurisdiction over registered premises of provider of service from which output services are exported is situated. By CA Atul Gupta

  10. Major Difference b/w Old Provisions and New Provisions Diff b/w Old Provisions and New Provisions By CA Atul Gupta

  11. Diff b/w Old Provisions and New Provisions By CA Atul Gupta

  12. Procedure for Filing Refund Claim • First of all, online refund request should be created before filing of refund claim with department. (www.aces.gov.in>service tax>login>REF>Refund Request>create) • Application of refund claim shall be accompanied with certificate in Annexure A-I duly certified by Chartered Accountant (Whether Statutory Auditor or Other, but he is required to certify that he has checked books of accounts as whole) certifying the correctness of refund claim. • The application for the refund shall be signed by authorized person. (e.g. Partner in case of Partnership Firm, any person authorized by BOD in case of company etc). By CA Atul Gupta

  13. Essential Documents • Following documents are required to be attached along with refund claim application: • Acknowledgment of Online Refund request; • Annexure A-I (Certificate from Auditor); • Copy of Export Invoices; • Copy of agreement entered into with Service Receiver for Export of Service; • Copy of Input Invoices; • Bank Statement of relevant period; • Justification of availment of input service; • Challan(s) of service tax paid; • Copy of ST-3 for the relevant period; • Copy of ST-2. By CA Atul Gupta

  14. Refund Claim to Exporter of Goods By CA Atul Gupta

  15. Topic To Be Discussed By CA Atul Gupta

  16. Nature of Exporter • Exporter of goods can be classified in two parts: • Manufacturer Exporter – Who Manufactures the goods and then exports them. • Merchant Exporter – Who exports the goods after purchasing the same from market i.e. who is engaged in trading of goods. By CA Atul Gupta

  17. Relevant Rules & Notification • Manufacturer Exporter can file refund claim in two stages: a. For services used upto place of removal – Under Rule-5 of CCR, 2004 read with NN 27/2012 – C.E. (NT) dated 18-06-2012; b. For services used after place of removal – Under notification no 41/2012 – ST dated 29-06-2012. (Because services used after place of removal are not covered under definition of input service given under CCR) • Merchant Exporter can file refund claim for all input services used for export of goods under NN 41/2012 – ST dated 29-06-2012. (input service means all services used for export of goods except services which are specifically disallowed in Rule – 2(l) of CCR) * List of Specified services given under earlier Notification 52/2011 – ST has now been scrapped and now all input services used for export of goods is eligible under NN 41/2012 – ST. By CA Atul Gupta

  18. Frequency of Refund Claim • Under Rule – 5 of CCR read with NN 27/2012 C.E. (NT) dated 18.06.2012 refund claim shall be filed QUARTERLY; (quarter means Apr to Jun and so on) • Under NN 41/2012 – ST no such period is defined therefore refund claim can be filed either for quarterly/half yearly/yearly. Generally assessee opts for quarterly refund claim. By CA Atul Gupta

  19. Quantum of Refund Claim • As per Rule-5 of CENVAT Credit Rules, 2004 read with Notification No 27/2012 C.E. (NT) dated 18.06.2012 the amount of refund claim may be calculated as under: Refund Amount = Export Turnover of Goods*Net Cenvat Credit Total Turnover • Net Cenvat Credit = Total CENVAT credit availed on inputs and input services by the manufacturer during the relevant period; • Export Turnover of Goods = Value of Final Product and intermediate product cleared during the relevant period and exported without payment of Central Excise Duty under Bond or Letter of Undertaking. (Value as per Excise Return) • Total Turnover = Value of All Excisable goods Cleared during the relevant period including exempted goods, dutiable goods and excisable goods (Value as per Excise Return) contd.. By CA Atul Gupta

  20. Quantum of Refund Claim • As per Notification No 41/2012, assessee may file refund claim for, an amount of service tax paid, to input vendors. • It means no ratio shall be applied in this case and refund claim shall be allowed of actual amount paid to vendors. By CA Atul Gupta

  21. Time Limit for Filing Refund Claim • As per NN 27/2012 – CE (NT) a refund claim shall be filed: • Within One Year; • From relevant date; • As provided in Section – 11B of Central Excise Act, 1944; Relevant Date shall be date of export of service. • As per NN41/2012 – ST refund claim shall be filed within One Year from the date when custom officer makes an order permitting clearance and loading of goods for exportation (i.e. from Let Export Order Date) . contd.. By CA Atul Gupta

  22. Time Limit for Filing Refund Claim • The above given date cannot be extended in any circumstances and no authority condones delay in filing of refund claim. • The Apex Court in the case of [ACC Vs. Anam Electrical Mfg. Co. [1997] 90 E.L.T. 260 (SC)] it has been clarified that any appellate court, civil court, high court cannot extend the period of limitation and such a direction will be illegal. • Likewise in the case of [Brite Neon Signs V. Commissioner of Central Excise, New Delhi [2002] 149 E.L.T. 330 (Tribunal Delhi)] It has been observed that Tribunal has no discretion under Section 11B to condone the delay involved in the filing of the refund claim. By CA Atul Gupta

  23. Where to be Filed? • In both the cases i.e. under Rule-5 of CCR, 2004 & under NN 41/2012 – ST: • Refund claim shall be filed; • With AC/DC of Central Excise; • having jurisdiction over registered factory (Rule-5); or • having jurisdiction over registered factory or registered office of assessee. (NN 41/2012 – ST) By CA Atul Gupta

  24. Procedure/Conditions for Filing Refund Claim • Rule-5 of CCR, 2004: • An online refund request is required to be created before filing of refund claim with department. (www.aces.gov.in > Excise> Login > REF > Refund Request > Create). • Thereafter, signed application along with other documents shall be submitted with department. • A certificate in Annexure A-I, duly signed by the auditor (Statutory or any other) certifying the correctness of refund claimed in respect of export of service shall be submitted with refund application. (i.e. Under rule-5 of CCR, 2004 CA Certificate is not required) contd.. By CA Atul Gupta

  25. Procedure/Conditions for Filing Refund Claim • NN 41/2012 - ST: • The refund under Notification No 41/2012 – ST shall be claimed either on the basis of rates specified in the schedule of rates annexed to this notification or on the basis of documents i.e. on actual basis; • Refund claim on actual basis shall not be allowed to be claimed if amount of refund calculated on actual basis is less than twenty percent (20%) of the refund available on the basis of rates specified in the schedule; • No CENVAT credit of service tax paid has been taken under CENVAT Credit Rules, 2004;  • Service provider who has provided services to exporter shall not be eligible to claim refund of such service tax; • Payment should be received in convertible foreign currency within one year. By CA Atul Gupta

  26. Essential Documents • Following documents are required to be attached along with refund claim application: • Acknowledgement of Filing Online Refund Request; • Copy of Export Invoice(s); • Copy of Shipping Bills/Bill of Export; • Copy of Bank Realization Certificate; • Copy of Input Invoices; • Justification for Availment of Input Services for provision of Export of Goods; • Bank Statement for Relevant Period; contd.. By CA Atul Gupta

  27. Essential Documents • Agreement with parties for export of Goods; • Form ARE-1; • Challan(s) for service tax paid; • Copy of ER-1 for relevant period; • Form RC i.e. Registration Certificate of Excise By CA Atul Gupta

  28. Refund Claim to Units in SEZ/Developer of SEZ

  29. Topic To Be Discussed

  30. Relevant Notifications and Provisions • NN 12/2013 – ST dated 01-07-2013 • Exemption is available to Unit(s) located in SEZ/Developer of SEZ; • Exemption is available by two different methods: • Ab-Initio Exemption; & • Refund Claim. • Exemption shall be available only for specified services; “Specified Service” means services used for authorized operations and for which SEZ unit or Developer shall get an approval by Approval Committee. By CA Atul Gupta

  31. Ab-Initio Exemption Versus Refund Claim • Ab-Initio Exemption: • Specified service received; • Used exclusively; • For authorized operation; • Refund Claim: • When specified services not used exclusively for authorized operations; or • Where Ab-initio exemption is admissible on specified services but not claimed. By CA Atul Gupta

  32. Frequency of Refund Claim • NN 12/2013 – ST prescribes that: • SEZ/Developer of SEZ shall submit; • only one refund claim; • For every quarter. • Quarter means period of 3 consecutive months with 1st quarter beginning from 1st April of every year & so on. By CA Atul Gupta

  33. Quantum of Refund Claim • As per NN 12/2013 – ST read with Rule-7 of CENVAT Credit Rules, 2004, refund claim shall be calculated as follows: • Turnover of SEZ = Turnover of Authorized Operations during relevant period; • Total Turnover of All Units = Turnover of SEZ/Developer of Authorized & Unauthorized Operations and DTA Unit(s); • Service tax paid on Services means services which are used commonly for authorized operations in SEZ and operation in (DTA); By CA Atul Gupta

  34. Time Limit for Filing Refund Claim • NN 12/2013 – ST prescribes that: • The claim for refund shall be filed; • Within ONE YEAR from the end of month; • in which actual payment of service tax was made; • to service provider. AC/DC may permit extended period. Illustration: ABC Pvt. Ltd. is a company located in SEZ. April 2014 to June 2014, ABC received some services for which payment for April 2014 and so on has been made in same month. As per supra mentioned notification, ABC has to file refund claim within one year from the end of April 2014 month i.e. up to 30th April, 2015. By CA Atul Gupta

  35. Where to be Filed? • A unit of SEZ or Developer of SEZ shall: • File the claim of refund; • With jurisdictional AC/DC of Central Excise ; • In Form A-4. By CA Atul Gupta

  36. Essential Documents • Following documents are required to be attached along with refund claim application: • Form A-4 i.e. Application for Refund claim; • Acknowledgement of Online Refund Filed; • Copy of output invoices; • Copy of relevant Input Invoices (on which refund is being claimed); • Registration Certificate i.e. ST-2; • Service Tax Return i.e. ST-3; & • Bank Statement for the relevant period. By CA Atul Gupta

  37. Refund Claim under Rule 5B of CENVAT Credit Rules, 2004

  38. Topic To Be Discussed

  39. Relevant Rule and Notification • Refund Claim under Rule – 5B of CENVAT Credit Rules, 2004 is allowed to; • A service provider; • Providing services notified under Section – 68(2); • Unable to utilized CENVAT Credit; • For payment of service tax on specified output services • Introduced w.e.f. 1st July, 2012; • Due to partial reverse charge mechanism; • Safeguard, conditions & limitations given under NN 12/2014 – C.E. (NT) dated 03-03-2014. By CA Atul Gupta

  40. Specified Services • NN 12/2014 – C.E. (NT) provides that refund shall be claimed for providing following output services: • Renting of Motor Vehicle (Non-Abated); • Manpower Supply Services; • Security Services; • Works Contract Service. By Individual/HUF/Partnership Firm to Body Corporate. By CA Atul Gupta

  41. Frequency of Refund Claim • NN 12/2014 – C.E. (NT) prescribes that: • Refund shall be claimed; • for a period of Half Year; • of CENVAT Credit availed during that half year; • for providing output services (4 services). • Half year means period of six consecutive months with 1st half year beginning from 1st April of every year and 2nd half year from the 1st day of October every year. By CA Atul Gupta

  42. Quantum of Refund Claim • As per NN 12/2014 – C.E. (NT) refund claim shall be computed as follows: • Where, contd.. By CA Atul Gupta

  43. Quantum of Refund Claim • The amount of refund claim shall be minimum of the following two conditions: • Amount Calculated by the Formula Given Above; • Amount equivalent to Liability of Service Receiver under Partial Reverse Charge Mechanism for the services provided to them • Key Points: • CENVAT Credit availed only on input and input services shall be allowed to be refund i.e. no refund allowed on CENVAT Credit on Capital Goods; • If any input/input service has been used prior to 1 July, 2012, the refund cannot be claimed under this notification even though the CENVAT Credit has been availed after 1 July, 2012. By CA Atul Gupta

  44. Time Limit for Filing Refund Claim • Application of Refund shall be filed; • In Form-A; • Before the expiry of One Year from the due date of filing of service tax return; • If time limit to file return has been extended by CG then one year shall be counted from such extended date. Illustration: If due date of filing STR for the period Apr’14 to Sep’14 is 25th October, 2014 then last date for filing refund claim shall be 24th October, 2014. By CA Atul Gupta

  45. Where to be Filed? • A Service provider providing specified services: • Shall file the claim of refund; • With jurisdictional AC/DC of Central Excise ; • In Form A. By CA Atul Gupta

  46. Essential Documents • Following Documents are required to be submitted with refund claim application: • Acknowledgment of Online Refund Request; • Attested Copy of Output Invoices; • CENVAT Credit Register for Relevant Period; • Invoices of Inputs/Inputs Services Received; • Copy of challan (if any) for payment of tax; • Service tax Return i.e. ST-3; • Registration Certificate i.e. ST-2. By CA Atul Gupta

  47. Refund of Excess/Wrong Service Tax Paid

  48. Topic To Be Discussed

  49. Reasons for Excess/Wrong Payment of Service tax • Clerical Error; • Dual Payment of Service tax due to internet baking error/server error; • Omitted to avail the benefit exemption; • Due to non availability of data; • Incorrect Interpretation of provisions. By CA Atul Gupta

  50. Legal Provisions Refund can be claimed in two ways: a) Self-Adjustment of Service Tax: In accordance with Rule-6(4A) of Service Tax Rules, 1994 which is as follows: • Adjustment can be made: • If assessee has paid any amount in excess; • From service tax liability for a month or quarter; • Assessee may adjust such excess amount; • Against his liability for succeeding month or quarter. contd.. By CA Atul Gupta

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