Refund claim

[Guest]

One STPI unit has to pay commission on export to a foreign company. Is it necessary for the Company to pay first service tax on import of services and thereafter file claim for refund or there may be any procedure for not paying service tax on import of these service.

[Guest]

Export of Service Rules permit non-payment of service tax only on services directly exported and such exemption is not provided for interim services called deemed export services. For such cases, you may have pay service tax first and then file a claim for refund as per the Rules.

[DEV KUMAR KOTHARI]

View of Mr.Ramanujam appears correct. There must be strong representations from exporters to concerned authoities for simplifications - there is no point in first collect and then refund policy. However, it appears that these policies are maintained for the scope of extra bucks being earned by concerned persons (officers and staff have to be kept happy)including professionals - big thank to the framers of such policies. But it is not in national interest - a cause of national human resources- but again if there is no such wastage will there be oversupply of such services causing more rate cuttings by professionals?

AI Summary

Debate on Service Tax: Pay Before Claiming Refund on Imported Services Per Export of Service Rules. Policy Simplification Urged. A discussion on a forum addresses whether a company must pay service tax on imported services before claiming a refund. One participant explains that the Export of Service Rules allow for non-payment of service tax only on directly exported services, not on interim services, requiring payment first and then a refund claim. Another participant agrees but criticizes the policy of collecting and refunding service tax, suggesting it benefits certain individuals financially and is not in the national interest. They argue for policy simplification to avoid unnecessary resource wastage and potential oversupply of services.