Credit of service tax paid during the premises was under construction

[puneet virmani]

'A' is a B.P.O operational after 2 months from now-services to be rendered are covered under business aux. service but to be wholly exported as covered by export rules.Question is as now office from where services are to be rendered is under contruction and service tax is paid under various heads till office gets ready.Whether 'A' company can take refund of service tax paid in office construction even though services r to be rendered after 2 months(exported).

[Surender Gupta]

There is no scope for get the refund of Credit before any export of services. In your case, you can accumulate the service tax paid on the input services, can claim the refund only when you start actual export of output services.

AI Summary

Refund of service tax credits not available until actual export of services; credits may be accumulated and claimed later.
No refund of service tax credits paid on input services during construction is available prior to actual export of the output services; the taxpayer may accumulate those input credits and claim refund only when exports commence under the export rules.