Eligibility of refund to the service receiver

[VINOD KUMAR]

Dear sirs. Xyz ltd. is having huge amount of cenvat credit accumulated in his credit due to supply of goods under notification no. 12/2012-ce sl. no 338/336. He is receiving wct, mra, and cab services and paying ST undef reverse charge. He is also providing some output services as a service provider. My queries are:-1. is he eligible for refund of service tax paid by him under reverse charge on wct, mra and cab as a service receiver. 2. Is he eligible for refund of inputs under rule 5 of CCR 2004 on the supply to mega power project under sl. No. 336and 338 of notification no. 12/2012-ce. All these supplies has been treated as deemed export. 3. Any other way under indirect taxlaws/FTP which he can use to cash his cenvat credit. The manufacturer is having cenvat credit of more than ₹ 5 crores as 80% supply is deemed export. Further, he has no export out of india. Please reply. Thanks and regards for your valuable suggestion.

[Madhukar N Hiregange]

The option of procurement under advance license and application for refund under rule 5 regularly could bring this accumulation down.

AI Summary

Refund of service tax under reverse charge: advance license procurement and refunds under rule 5 can reduce accumulated credit.
Whether the service recipient can obtain refund of service tax paid under the reverse charge on wct, mra and cab services, and refund of inputs under Rule 5 CCR 2004 for supplies treated as deemed exports under Notification No. 12/2012-CE, sl. nos. 336 and 338, and what other indirect tax or FTP mechanisms exist to monetise large accumulated cenvat credit. The practical suggestion offered is procurement under an advance license and regular applications for refund under Rule 5 to reduce the accumulation.