Refund claim

[Asked by 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.

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

Export of Service Rules: direct export only - pay tax on deemed imports then pursue refund under the rules.
Under the Export of Service Rules, non-payment of service tax is limited to services directly exported; interim or deemed export services are not covered. For services treated as deemed exports or interim services, the operative mechanism is to pay service tax on import and then file a refund claim under the Rules.