Refund / Exemption from service tax in relation to four services - exporters of goods "

Government has issued Notification No. 40/2007-ST dated 17.09.2007 providing refund of service tax paid by exporters on the following four taxable services, which are not in the nature of "input services" but could be linked to export goods. 

(i) Port Services provided for export. (Section 65[105][zn] of the Finance Act, 1994)

(ii) Other port Services provide for export. (Section 65[105][zzl])

(iii) Services of transport of goods by road from ICD to port of export provided by Goods Transport Agency. (Section 65[105][zzp])

(iv) Services of transport of export goods in containers by rail from ICD to port of export. (Section 65[105][zzzp]) 

2. Service tax paid by exporters on input services used for export goods is refunded under the existing schemes. Drawback scheme also factored service tax paid on input services used for export goods. 

3. The issue of extending refund of service tax paid on taxable services, which are not "input service" but could be attributable to export goods was examined. Unlike goods, Services are intangible in nature. Hence, post audit verification to establish linkage of use of service with export requires a simple and verifiable method. Government held discussion with the stake-holders and identified the above mentioned taxable services for which refund could be provided wherever use of the said taxable services could be linked to exports. 

4. The said notification is available on the CBEC website www.cbec.gov.in. For details, the notification may be referred to.

Refund of service tax on specified export-linked services allowed where clear verifiable linkage to exported goods is established. Notification provides refund of service tax to exporters for four specified taxable services linked to exported goods - port services for export, other port services for export, transport by road from ICD to port by Goods Transport Agency, and transport in containers by rail from ICD to port - where a simple, verifiable post audit linkage between the service use and the exported goods can be established; this supplements existing input service refunds and the drawback scheme and is published on the CBEC website.