Refund of Service tax - Payment to overseas agent in Cash or Cenvat

[shaji thomas]

1. Is it necessary that ST on commission paid to overseas agent to be paid by cash. Cannot be paid from Cenvat credit? 2. In case of refund of ST (which was debited from Cenvat account) in case of exports, can amount of ST be refunded in the form of credit in Cenvat, or is it necessary to be refunded by cash? 3. In case of refund of ST, in respect of the services provided during January to March 09, can the application for refund be filed in Noember, i.e. after six months (according to Notification No. 17/2009)? As per Notn. No. 41/07, it time limit is 6 months?

[Rama Krishana]

Post notification no. 17/2009, the commissioner paid for export of goods to the overseas agents are exempt from service tax. But for the period prior to notification 17/2009, you need to pay service tax first and claim the same as refund under notification no. 41/2007. Regarding, period of limitation, this issue of subject to judicial review as section 11B of central excise act, 1944 allows to file refund claim within one year. Similar provision has been made in notification no. 18/2009. Therefore, you must file the refund if you could not filed within 6 months. Let the department reject, you should choose to appellate remedies till the matter is finally resolved.

AI Summary

Clarification on Service Tax Refunds for Overseas Agent Commissions: Use Cenvat Credit, File Refunds Within One Year Under Section 11B. An individual inquired about the payment and refund process of service tax on commissions paid to overseas agents, specifically whether it can be paid using Cenvat credit and how refunds should be processed. The response clarified that post-notification 17/2009, such payments are exempt from service tax, but for prior periods, tax must be paid first and then claimed as a refund under notification 41/2007. The reply also addressed the time limit for filing refund claims, suggesting that despite a six-month limit, claims should be filed within one year as per section 11B of the Central Excise Act, 1944, and pursue appellate remedies if necessary.