Service Tax Refund

[varsha mehta]

Dear Sir,

Vide Notification No. 92/2012 Cus (NT) dated 04.10.2012, new drawback rates have been notified. The Drawback schedule has two rates, one when CENVAT facility has not been availed and the other when CENVAT facility has been availed. While explaining the provisions of this Notification, vide Circular No 27/2012 –Cus Dated 05.10.2012, the Board has clarified that:

As in previous years, the drawback rates have been determined on the basis of certain broad parameters including, inter alia , the prevailing prices of inputs, Standard Input Output Norms (SION), share of imports in the total consumption of inputs, FOB value of export goods the applied rates of Central Excise & Customs duties, the factoring of incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods, factoring incidence of duty on HSD/Furnace Oil.

As can be seen from the highlighted portion above, the incidence of service tax paid on taxable services used as input services in the manufacturing or processing of export goods, has also been factored in the drawback rates.

There is a separate Notification (notification no. 52/2011-ST dated 30.12.2011) which allows refund of service tax on certain services used in respect of goods exported.

Now, my question is whether the exporter can avail drawback and also simultaneously avail the refund of service tax under notification no. 52/2011-ST. Since Notification 92/2012 Cus(NT) does not prohibit the availment of refund under notification no. 52/2011-ST, the same should be allowed. Also there is no restriction in notification no. 52/2011-ST. with regard to availment of drawback. Hence both drawback and refund should be admissible or not.

Please clarify me.

Thanks,

VARSHA MEHTA

AI Summary

Exporters Must Choose: Claim Drawback or Service Tax Refund, Not Both, per Amended Notification No. 52/2011-ST. An individual inquired about the possibility of simultaneously availing both the drawback and service tax refund for exported goods, referencing Notification No. 92/2012 Cus (NT) and Notification No. 52/2011-ST. Two respondents clarified that, according to the amended Notification No. 52/2011-ST, exporters must choose between claiming a drawback or a service tax refund, as both cannot be availed simultaneously. The conditions outlined in the notifications specify that the exemption can be claimed based on rates or documents, but not both at the same time.