REBATE AND BRC.

[VINOD KUMAR]

DEAR EXPERTS, GOOD MORNING. Sir, whether BRC or realisation of export proceeds is mandatory before sanction of rebate claim. If so, please provide relevant circular/notification no. Thanks and regards sir.

[YAGAY and SUN]

circular no. 5 /2009-customs

[VINOD KUMAR]

Thank you sir. But this is rebate of service tax under notification no. 41/2012-ST. I have read somewhere that BRC is mandatory for rebate under notification no. 41/2012-ST but couldn't locate any circular/instructions to this effect.

[Mahir S]

Circular No. 354/70/1997 CX dated 13.11.1997 issued vide F.No. 209/54/97 - CX - 6.

[Kadayam Ganapathy Subramanian]

If this is a case of rebate of service tax paid on specified services under Notification No.41/2012-ST dated 29.06.2012, then refer paragraph No.4 of the said notification which is detailed below:

" where any rebate of service tax paid on the specified services has been allowed to an exporter on export of goods but the sale proceeds in respect of said goods are not received by or on behalf of the exporter, in India, within the period allowed by the Reserve Bank of India under Section 8 of the Foreign Exchange Management Act,1999 (42 of 1999), including any extension of such period, such rebate shall be deemed never to have been allowed and may be recovered under the provisions of the said Act and the rules made thereunder;"

From the perusal of above paragraph, it is clear that realization of export proceeds of goods is mandatory and if not received within the stipulated period allowed by RBI, then the rebate under the above notification should not have been allowed and the same is liable to be recovered.

Regards,

K.G Subramanian

AI Summary

Rebate of service tax requires export proceeds realization or BRC before a rebate claim can be sustained. Rebate of service tax under Notification No.41/2012-ST is conditioned on realization of export proceeds within the period permitted under the foreign exchange regime; absence of such realization renders the rebate deemed never allowed and subject to recovery. Bank Realisation Certificate or equivalent evidence of realization serves as the operative proof that proceeds have been received within the prescribed period, and failure to establish realization exposes the rebate to recovery under foreign exchange recovery provisions.