Export of services and rebate of service tax in case of export of services under service tax

By | November 11, 2013

Export of services and rebate of service tax in case of export of services under service tax

Meaning of export of services – any taxable service in relation to any goods or material or any immovable property as the case may be provided or agreed to be provided outside India through internet or an electronic mode or computer network or any other means is treated as export of services.

The provision of any service provided or agreed to be provided shall be treated as export of service   when,-

a)      The provider of service is located in the taxable territory ,

b)      The recipient of service is located outside India,

c)       The service is not a service specified in the section 66D of the Act,

d)      The place of provision of the service is outside India,

e)      The payment for such service has been received by the provider of service in convertible foreign exchange, and

f)       The provider of service and  recipient of service  are not merely establishments of a distinct person in accordance with  item (b) of Explanation 2 of clause (44) of section 65B of the Act

Central government has specified categories of taxable services which can be qualified as export of services

  • Taxable services related to immovable property
  • Taxable services performed out of India
  • Taxable services used out of India but provided in India, subject to some conditions

Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such service and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.”

Rebate of duty paid on excisable inputs or the service tax and cess paid on all input services used in provision of exported services

  1.   As per notification No. 39/2012-ST dated 20/06/2012, rebate is allowed on export of services to any country other than Nepal and Bhutan.
  2.   Rebate will be allowed to exporter only after making payment of duty, service tax and cess to provider of service or government as the case may be, i.e. rebate will not allowed on book entries.
  3.   The claim for Rebate should be at least Rs 1000.
  4.   Person claiming rebate can not avail CENVAT Credit on inputs, Input services for which rebate is claimed.
  5.   If the rebate is claimed wrongly i.e.
  • Where exporter did not pay service tax and cess on inputs and input services
  • Services has not been exported and rebate claimed for that
  • Exporter has claimed CENVAT Credit on which rebate also claimed

Then rebate allowed to the service provider shall become recoverable along with interest.

  • Service provider or exporter has to file declaration  specifying the details of inputs and inputs used for providing services to jurisdictional assistant / deputy commissioner of central excise.
  • Service provider or exporter can procure the inputs only from registered factory or from a first stage or second stage dealer and shall be accompanied by invoices.
  • The rebate claim shall be filed in form AS.T.R. – 2 with the jurisdictional AC/DC of central excise along with specified documents relating to the period for which rebate is claimed.
  • After being satisfied that the rebate is correct and allowable then jurisdictional AC/DC shall pass the order sanctioning rebate either wholly or partly




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