Export of Services

Export of Services

With effect from 01/07/2012 export of services is governed by Rule 6A of service tax rules, 1994.

    Rule 6A

The provision of service treated as export when

·   The provider of services is located in Taxable Territory

·   The recipient of service is located outside India

·   The service is not mentioned in Section 66D (negative list)

·   Place of provision is Outside India

·   Payment has been received in convertible foreign currency and

·   Provider & Receiver should be separate legal entities.

    Export Benefits

With the new concepts in service tax export benefits can be summarized as under

1.  Based on POP Rules in case provision of service has taken place outside the taxable territory, the service tax would not be chargeable on such transaction.

2.    NN 39/2012-ST-Rebate on whole of the service tax & cess paid on all Input Services used in providing services exported to any country other than- Nepal, Bhutan.

3.   Rule 5 of CCR- Refund of Service tax to a person who exports services without payment of service tax to the extent of Cenvat credit availed by him on input services or input goods in the ratio of his export turnover to total turnover.

4.  NN-31/2012-ST- Exemption to manufacturer exporter & Merchant exporter from payment of service tax on input services of GTA in a goods carriage from place of removal to where goods are exported.

5.    NN 41/2012-ST- Refund of service tax paid on specified input services used by a merchant exporter or manufacturer exporter of goods.

6.    NN 42/2012-ST- Exemption to manufacturer exporter & Merchant exporters

From payment of service tax calculated on a value of 10% of the FOB value

Of export goods for which the said services used,

On services provided by a commission agent

Located outside India &

Engaged by the exporter of India to cause sale of goods exported by him.

All the export benefits are in relation to refund of input taxes paid on Inputs & Input Services.

In no situation service tax paid on export of services is refunded which was allowed in past under export of service rules.

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For suggestions and feedback please feel free to contact us via e-mail; dhruvjain1987@yahoo.co.in or you can log on to our website: http://dhruvjainassociates.in/contact

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This blog is the property of Dhruv Jain & Associates. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of the content of blog or of the blog itself  without the prior written consent of the author of this blog is strictly prohibited and doing so will attract legal proceedings. Any views or opinions presented in this blog post are solely those of the author and for informative purpose only and should not be treated /used as guiding rule or professional consultancy in any case. The matter of discussion is highly sensitive to the amendments made by the government under various laws and may not be updated as per the changes. Readers are suggested to take prior professional consultancy of experts before using the blog or its material in any way.

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Exemption under service tax (contd.3)

Exemptions under Service Tax with Effect from 01-07-2012

Sl. No.	Category	Exemption
Notification No 25/2012-ST
20	Transport by Rail	Transportation by Rail or Vessel of following goods           1.      Petroleum           2.      Relief material for victims of calamities           3.      Defense equipment           4.      Postal mail or mail bags           5.      Household effects           6.      Registered news paper or magazines           7.      Railway equipment           8.      Agricultural produce           9.      Foodstuff         10.  Chemical fertilizers & oilcakes
21	Goods Transport Agency	Service by GTA for transportation of          1.      Fruits, Vegetables, eggs, milk, food grains, pulses in a goods carriage          2.      Goods where amount <= ₹1500 in a single goods carriage          3.      Goods where amount <= ₹ 750 for single consignee
22	Hire	Giving on Hire to         1.      State transport undertaking- motor vehicle to carry more than 12  passenger         2.      GTA a means of transportation of Goods.
23	Transport of Passengers	Transport of passengers by         1.      Air, embarking from or terminating in an air port located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Bagdogra.         2.      Contract carriage excluding tourism, conducted tours, charter or hire         3.      Ropeway, cable, car aerial tramway.
24	Parking	Vehicle parking to general public excluding leasing of spaces to entity providing such facility.
25	Public Utility service	Service provided to Government, Local authority by way of         1.      Function of municipality in relation to water supply, public health, sanitation, conservancy, solid waste, slum improvement, up gradation         2.      Repair, maintenance of vessel or an aircraft
26	General insurance services	GIS for Specified schemes generally for rural development activities
27	Service by Incubatee	Service by incubate having turnover up to 50lakh rupees up to 3 years of agreement.
28	Un-incorporated body or NPE	Services by un-incorporated body or NPE to its own Members by way of reimbursement of charges or share of contribution         1.      As trade Union         2.      For provision of activity exempt from levy of service tax         3.      Up to ₹5000 per month per member for sourcing of goods or services from 3rd party for common use in a housing society or residential complex.
29	Person in securities Market	Services by person in their respective capacity        1.      Sub-broker, authorized person to stock broker        2.      Authorized person to member of commodity exchange        3.      Mutual fund agent to mutual fund co.        4.      Distributor to mutual fund        5.      Selling agent of lottery tickets to distributor        6.      Selling agent of SIM cards or recharge vouchers        7.      Business facilitator to banking company or insurance co. in rural areas        8.      Sub-contractor providing works contract services to another contractor  providing Exempt works contract services
30	JOB-WORK	Intermediate production process as Job Work in relation to        1.      Agriculture, Printing, Textile Processing        2.      Cut & polished diamond and gemstones, plain & studded jewellery        3.      Any goods on which appropriate duty is payble by principal manufacturer        4.      Process of electroplating, anodizing, powder coating etc, during course of manufacture of parts of cycle or sewing machines up to value of taxable service of 150lakh rupees in a F/Y provided value had not exceeded 150lakh in preceding F/Y
31	Business Exhibition	Service by organizer to any person for business exhibition held OUT SIDE INDIA
32	Telephone Calls	Making Telephone calls from       1.      Department run public telephone       2.      Guaranteed public telephone for local calls only       3.      Free telephone at air port & hospital without bills
33	Slaughtering of Animals	Slaughtering of Animals
34	Provider located in NON-Taxable Territory	Service provider located in Non-Taxable territory & received by        1.      Government for purpose other than commercial        2.      Any entity registered under 12AA i. Tax Act.        3.      A person located in Non-Taxable territory.
35	Libraries	Service of public libraries by way of Lending of books, Publication or any-other knowledge enhancing content or material
36	ESIC	ESIC to person under E. Insurance Act
37	Transfer of going concern	Transfer of going concern as a whole or independent part
38	Public Convenience	Public convenience such as bathroom, washroom, lavatories, urinals, toilets
39	Function entrusted to municipality	Service by a governmental authority by way of activity in relation to any function entrusted to municipality under article 243W of constitution.
Notification No 27/2012-ST
1	Foreign Diplomatic Mission	Services Provided by any person for the official use of a FDM or consular post in India or for personal use
Notification No 29/2012-ST
1	Property Tax	Service of renting of immovable property Service tax exempt by amount Service tax calculated – [service tax on (GAV-property Tax)] ie. Service tax on property tax portion.
Notification No 31/2012-ST
1	Exporter of Goods- GTA	Services to exporter For transport of goods by GTA In a goods carriage From where goods are exported.
Notification No 32/2012-ST
1	TBI/ STEP	Services provided to/by a TBI or STEP
Notification No 33/2012-ST
1	Small service providers	Aggregate value not exceeding ₹10,00,000 in a F/y
Notification No 40/2012-ST
1	SEZ	Services received by SEZ or Developer of SEZ
Notification No 42/2012-ST
1	Exporter of goods- Foreign commission agent	Commission agent located outside India Engaged by exporter in India To cause sale of goods exported by him Not liable to pay service tax As in excess of service tax calculated On a value up to 10% of FOB value of export goods
Notification No 43/2012-ST
1	Transport of Goods 7 Passenger by Indian Railway	Service by Indian railway for transport of passenger or goods Till 30th September

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For suggestions and feedback please feel free to contact us via e-mail; dhruvjain1987@yahoo.co.in or you can log on to our website: http://dhruvjainassociates.in/contact

___________________________________________________________________________________

This blog is the property of Dhruv Jain & Associates. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of the content of blog or of the blog itself  without the prior written consent of the author of this blog is strictly prohibited and doing so will attract legal proceedings. Any views or opinions presented in this blog post are solely those of the author and for informative purpose only and should not be treated /used as guiding rule or professional consultancy in any case. The matter of discussion is highly sensitive to the amendments made by the government under various laws and may not be updated as per the changes. Readers are suggested to take prior professional consultancy of experts before using the blog or its material in any way.

_____________________________________________________________________________________________