clerification on not.14/2014-ST vs 42/2012-ST

[RAM SHARMA]

Dear Expert, We are paying commission to our subsidiary company and foreign agent on export sale under not 42/2012 with fullfill all these condition. Now, whether we required to file half yearly S.T.return under not 42/2012. Pl. Advice. Thanks

[Deepak Aggarwal]

Dear Sir,

Relevant provisions mentioned in said notification 42/2012 is as below:

Provided that-

(a) the exemption shall be available to an exporter who,-

(i) informs the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory or the regional office or the head office, as the case may be, in Form EXP3 appended to this notification, before availing the said exemption;

(ii) is registered with an export promotion council sponsored by the Ministry of Commerce or the Ministry of Textiles, as the case may be;

(iii) is a holder of Import-Export Code Number;

(iv) is registered under section 69 of the said Act;

(v) is liable to pay service tax under sub-section (2) of section 68 of said Act, read with item (G) of sub-clause (i) of clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules,1994, for the specified service;

(b) the invoice, bill or challan, or any other document by whatever name called issued by the service provider to the exporter, on which the exporter intends to avail exemption, shall be issued in the name of the exporter.

(c) the exporter availing the exemption shall file the return in Form EXP4, every six months of the financial year, within fifteen days of the completion of the said six months;

(d) the exporter shall submit with the half yearly return, after certification, the documents in original specified in clause (b) and the certified copies of the documents specified in column (3) of the said Table;

(e) the documents enclosed with the return shall contain a certification from the exporter or the authorised person, to the effect that specified service to which the document pertains, has been received and used for export of goods by mentioning the specific shipping bill number on the said document.

(f) where the exporter is an individual or a proprietorship concern or an HUF or a partnership firm, the documents enclosed with the return shall be certified by the exporter himself and where the exporter is any other person, the documents enclosed with the return shall be certified by the person authorised by the Board of Directors or any other competent person;

(g) where the amount of commission charged in respect of the specified service exceeds ten per cent. of the free on board value of the export then, the service tax shall be paid within the period specified under rule 6 of the Service Tax Rules, 1994, on such amount, which is in excess of the said ten per cent;

Conditions:

4) The exporter shall submit with the half-yearly return after certification of the same as specified in clause (g) of the proviso -

( i ) the original documents showing actual payment of commission to the commission agent; and

( ii ) a copy of the agreement or contract entered into between the commission agent located outside India and the exporter in relation to sale of export goods outside India:

As per above requirements, person need to be registered with CBEC, so he need to be filed a NIL return in case of even no taxable services provided in the relevant half year. Also as mentioned in notification, he need to submit documents related to commission paid to foreign agent with copy of agreement.

So, as per notification, it seems, filing of return is required.

Thanks

[RAM SHARMA]

As per not 14/2014 place of provision(intermediary service) rule has been changed. Now, still is required to file exp-4 return under not 14/2014. Pl clerify.

[Mahir S]

Sir,

Notification No 14/2014 ST dt 11^th July 2014 amended Rule 9 of POP Rules 2012 by amending the definition of Intermediary.

Earlier exemption was there on Commission paid to overseas agent for Export of Goods but it was conditional and upto prescribed limited. But now from 1^st October 2014, it is out of purview of service tax.

Hence from 1^st October 2014, As per Rule 9 of POP Rules 2012, Place of provision is location of service provider. Therefore, Commission Paid for facilitating sale of goods exported. is not taxable service and therefore the question of filing EXP-4 from 01.10.2014 does not arise.

 

 

 

[PAWAN KUMAR]

Dear SIr,

As per my view no need to file the EXP-4 under notification No.42/2012-ST.

AI Summary

Place of provision rule change alters intermediary service treatment; commission on export sales removed from service tax, affecting EXP4 filing.
Notification 42/2012-ST required exporters to notify in Form EXP3, register, and file certified half yearly returns in Form EXP4 enclosing original payment proofs and agreements for commission paid to overseas agents, with certification that services were used for export and tax liability where commission exceeds ten percent of FOB value; Notification 14/2014-ST amended the Intermediary definition so the place of provision is the service provider's location, leading commentators to conclude commission for export facilitation falls outside service tax and removes the EXP4 filing requirement for such commissions.