Refund claim - export of services

[Guest]

Following is my queries. •Do I entitle to claim the refund on all input services which has been availed for exporting the goods if there is no domestic sales under Rule 5 of Cenvat Credit Rule, 2004. •Assuming we have made domestic sales during the year. What would be the position if I have made export sales as well as domestic sales? •What would be the impact of Notification no. 41/2007–ST dated 6-10-2007?

[Sandeep Garg]

In case of export, you can claim refund of service tax paid on input services under rule 5 of the Service Tax Rules. In case you are having domestic billing, you can utilised total input credit to pay service tax on domestic billing.

[Mukesh Kumar]

Though I agree with the view of Mr. Niranjan Gupta, but the rule 5 is applicable only if your either engaged in Manufacturing of excisable goods or providing taxable services. If you are engaged in trading activity or to say merchant exporter, you have no option but to file a refund claim under notification no. 41/2007.

AI Summary

Claiming Refunds on Input Services for Exports under Rule 5 of Cenvat Credit Rules 2004: Key Clarifications A participant in a discussion forum inquired about the entitlement to claim refunds on input services used for exporting goods under Rule 5 of the Cenvat Credit Rules, 2004, especially when there are no domestic sales, and the implications when both export and domestic sales occur. One response indicated that refunds can be claimed for service tax paid on input services for exports, and input credit can be used for domestic sales. Another response agreed but clarified that Rule 5 applies only to manufacturers of excisable goods or providers of taxable services, not to traders or merchant exporters, who must file a refund claim under Notification No. 41/2007.