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

Service tax exemption for overseas agent commissions: pre-exemption tax refundable but limitation requires timely filing and appeals. Commission payments to overseas agents are exempt only after the later exemption notification; for earlier periods service tax must be paid and claimed as refund under the refund notification. Refunds of tax debited from Cenvat must follow the prescribed refund mechanism, and limitation is governed by a broader one year refund provision in central excise law and a later notification, so claimants should file refund applications and pursue appeals if department rejects.