ST Exemption for Foreign Commission Payment for export of goods by one of the unit from SEZ

[A Wilson]

Dear Experts,

Our Company is having many Branches in India and also having one Branch Office(one Unit) in Special Economic Zone and  and exports are made from this place. Now we are claiming Service tax paid on all input services by way of Refund vide Notification No.40/2012 dated 29th June 2012

Shall we eligible to get direct exemption for Commission payments made to foreign commission agent vide Notification No. 41/2012  dated 29th June 2012

When we have approached the ST Authority, they rejected our exemption claim since you are claiming the refund vide Notification No.40/2012 for other services, so you are eligible to claim the service tax on commission payment by way of refund only. You are not eligible for Notification No. 41/2012

Please give your inputs on this.

[A Wilson]

ST Exemption for Foreign Commission Payment for export of goods by one of the unit from SEZ

Dear Experts,

Sorry In previous post i have wrongly mentioned the Notification No.41 instead of 42

Now Corrected

Our Company is having many Branches in India and also having one Branch Office(one Unit) in Special Economic Zone and  and exports are made from this place. Now we are claiming Service tax paid on all input services by way of Refund vide Notification No.40/2012 dated 29th June 2012

Shall we eligible to get direct exemption for Commission payments made to foreign commission agent vide Notification No.42/2012 dated 29th June 2012

When we have approached the ST Authority, they rejected our exemption claim since you are claiming the refund vide Notification No.40/2012 for other services, so you are eligible to claim the service tax on commission payment by way of refund only. You are not eligible get direct exemption vide Notification No.42/2012

Please give your inputs on this.

[YAGAY andSUN]

The Central Excise People have rightly denied you in this matter.

 

[A Wilson]

Thank You Sir

AI Summary

Service tax exemption for commission payments versus refund treatment: refund claim may preclude a separate direct exemption. A unit in a Special Economic Zone exporting goods sought a statutory refund for service tax on input services and separately sought a statutory direct exemption for commission payments to a foreign agent. The tax authority rejected the exemption, holding that because refund relief was claimed for other services, commission payments could only be treated by way of refund and not by the separate direct exemption, a position accepted by a forum respondent.