Credit of input service instead of claiming refund for export.

[Harishanker Patel]

Dear All,

1.Whether aay manufacturer of excisable goods can take credit of all input services used for export of excisable goods instead of claim refund under rule 5.

2.If no than whether he can take credit on services for which refund is not available as per Notification No. 52/2011-Service Tax.

[YAGAY and SUN]

Well, Notification No. 52/2011-ST provide you two option to claim the refund of service tax which are attributable on export of goods.

You may opt for refund on actual basis by submitting the documentory evidences or you may seek refund on the basis on % as mentioned in the schedule to 52/2011 against the given Tariff Headings.

Further, this Notification No. 52/2011-ST has been supersessed by the New Notification No. 41/2012-Service Tax/ 29^th  June, 2012.

Please go through it for details.

[Harishanker Patel]

Dear Khatri Sir,

I want to know whether there is any option to a manufacturer of goods for input services other than GTA prior to 01.04.2012 used in relation with export of excisable goods either he can claim refund or he can avail credit.

[YAGAY and SUN]

Dear Sir,

If you go through the Declaration pertaining to Form A1 annexued to Notification No. 41/2012-ST then you would find following phrases, namely:-

ii) no CENVAT credit of service tax paid on the specified services used for export of goods has been taken/shall be taken under the Cenvat Credit Rule, 2004;

It means that though assess may have option to avail the CENVAT credit but it is advisable to go by the rebate throuhg refund scheme as mentioned in the above Notification.

Best Regads,

Pradeep Khatri

AI Summary

Cenvat credit availability limited for export related services; exporters are directed to use the refund mechanism for service tax.
The applicable notification provides refund routes for service tax attributable to exports-actual refund with documentary proof or a percentage based formula-and the succeeding notification requires a declaration that no Cenvat credit of service tax on specified services used for export has been taken or shall be taken, making the refund route the advisable mechanism for manufacturers exporting excisable goods.