Service Tax Refund

[Guest]

Dear Sir,

CBEC vide Customs notification no. 92/2012 –cus (NT)  dated 4^th Oct., 2012 read with AIR drawback schedule thereof has given following break up of drawback rate of 1% on export of SBM falling under Chapter 2304 :

AIR DRAWBACK SCHEDULE W.E.F. 10.10.2012 

Tariff Item no.	Description of goods	Unit	A		B
			Drawback when Cenvat facility has not been availed		Drawback when Cenvat facility has been availed
			Drawback Rate	Drawback cap per unit in Rs.	Drawback Rate	Drawback cap per unit in Rs.
(1)	(2)	(3)	(4)	(5)	(6)	(7)
2304	Oil-cake and other solid residues whether or not ground or in the form of pellets, resulting from the extraction of soyabean oil		1%		0.3%

Further para 6 of the said notification provides as under:

(6)          The figures shown under the drawback rate and drawback cap appearing below the column “Drawback when Cenvat facility has not been availed” refer to the total drawback (customs,  central   excise   and   service   tax  component   put   together)    allowable   and  those appearing under the column “Drawback when Cenvat facility has been availed” refer to  the drawback allowable  under the customs  component. The difference between the two columns refers to the central excise and service tax component of drawback. If the rate indicated is the same in both the columns, it shall mean that the same pertains to only customs component and is available irrespective of whether the exporter has availed of Cenvat or not.  

From the above schedule & Para 6 it is clear that now drawback consists of:

0.7%   towards Central Excise and service tax component

0.3%   towards Customs component.

My query is  when service tax component  include in 0.7%  whether refund of service tax paid on the taxable services which are received by an exporter of goods and used for export of goods is available or not.

[YAGAY andSUN]

Both schemes can't be simultenously adopted.

AI Summary

Drawback allocation: exporters cannot simultaneously claim drawback and separate service tax refund for services used in exports. CBEC's AIR drawback schedule separates the overall drawback into a customs component and a central excise plus service tax component; paragraph 6 explains that the difference between the columns represents the excise and service tax element. The practical consequence is that exporters cannot simultaneously adopt both schemes to claim the same benefit.