[aurangabad_ca] Johnny and Service Tax Refund Part - VII
Dear Professional Friends,
Wefeel pleasure to inform you that our article titled "Johnny & service taxRefund Part VII" has been published on many popular web sites. We are providing the direct link of all these web sites for yourreference :-
1. On taxguru.in :- http://www.taxguru.
3. OnTaxmanagementindi
4. On Forum4finance.
For the sake of convenience ofmembers of the group, we are publishing the same here also.
Johnnyand Service Tax Refund Part - VII
By: -
CA. Pradeep Jain
Siddharth Rutiya
Visit us at: www.capradeepjain.
In continuation of previous articles, elaborating thedifficulties in getting the refund claim under different services, we in thisarticle are unveiling the problems existing in the Service tax refund mechanismunder Services of purchase or sale of foreign currency, including moneychanging provided to an exporter in relation to export goods (Section65(105)
Johnny andJill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.
Presently, assesses are claiming refund orders under abovementioned Services and are experiencing vast intricacies in getting such refundorders. The refunds claimed by the assessees as against their exports are theirRights but are being refused by the departmental authorities on various argumentswhich are of no significance and worth less. Such reasons on which thedepartment is refusing the refund claims on the said services are being writtenout hereunder as follows: -
Johnny-Johnny! Yes papa!
Got the refund?
No Papa,
Telling lies?
No Papa,
What's the reason?
This papa: -
Johnny says: I went to the department to get the refundfor the above service availed by me in relation to export of goods, butdepartment said: -
Johnny-Johnnygo away,
Come again another day.
Your refund order has following Flay: -
The refund under Collection of export bills and letters ofcredit services such as advising commission, advising amendment, confirmationcharges (Section 65(105)(zm)) will not be allowed as the pre condition to availthe refund claim is that the said services must be either provided by a BankingCompany or a Financial Institution or a NBFC or a Commercial Concern or any OtherBody Corporate. As there is no documentary evidence in this regards, the refundclaim will not be allowed.
Johnny's View:
This is just a means of requirement that can be neglected asit is a fact that if we are paying the collection charges in respect of exportbills and letters of credit services then definitely the service received arerelated to export of goods and taking a liberal view the refund claims shouldbe allowed. Further, the services received by us in this respect are receivedby these specified bodies only and we are enclosing the documentary evidencesin this respect. Hence, the said conditions are cleared but the department doesnot agree and is denying the claims.
Johnny says: I went to the department next day again withthe corrections and further supporting but department said: -
Johnny-Johnnygo away,
Come again another day.
Your refund order has following more flay: -
The refund under purchase or sale of foreign currency, includingmoney changing provided to an exporter in relation to export goods as specifiedunder Section 65(105)(zzk) shall not be allowed as these services were notreceived from either a Foreign Exchange Broker or a Money changer or an AuthorizedDealer of Foreign Exchange. This is the prerequisite for claiming refund claimand hence refund claim will not be allowed.
Johnny's View:
The issue as alleged by the department is not correct and isto be avoided. It is a fact that in India only a Foreign Exchange Broker or a Moneychanger or an Authorized Dealer of Foreign Exchange are authorized for purchaseor sale of foreign currency including money changing. Hence, the refund claimis to be allowed in its entirety. Further, we are enclosing herewith thedocumentary evidences that these services are being provided by one of thosespecified authorities. The certificate of service provider is also enclosed.
Johnny says: I went to the department next day again withthe further corrections but department rejected saying: -
Johnny-Johnny go away,
You won't get refund anyway.
It has following more flay: -
The conditions for availing the refund claim under moneychanging services as specified under Section 65 (105)(zm) are that the servicesshall be received and used by the exporter for export of the goods and furtherthe assessee has not availed the CENVAT Credit of service tax paid. Further, theinvoices issued by the money changer do not fulfill all the requirements specifiedunder Rule 4A like category of service, Description of service, valid InvoiceNumber, Service tax rate, Service tax registration number and other alikethings.
Johnny's view: -
The view taken by the department is completely futile. Wehave already provided to the department the documentary evidences as regardsthe use of services for export of the goods. Further we submit that we have notclaimed any CENVAT Credit as regards these services and we are rightly eligiblefor refund claim.
At the last, the view taken by the Department as regards therequirements of Rule 4A we once again submit that the department should adopt aliberal view in this regard, more to in the case of Rule 4A of Service taxrules requirements. Even the Rule has relaxed certain requirements for bankingcompanies. Banks are Government undertaking. They work as per their documentsand do not fulfill the requirements. Even the objection was not raised by auditparty while conducting their audit. Moreover, in one of the case, the learnedadjudication officer has allowed the cenvat credit on the basis of certificateissued by the bank. Following the same analogy, the refund should be granted asall the basic requirement of this refund scheme is fulfilled i.e. the servicetax has been paid, the service is used for export goods and goods have beenexported. Henceforth, the allegation of the department is pointless fordisallowance of refund claim.
Fruitless again & again;
Johnny now in grief and pain!
Refund order now a dream;
His efforts have downstream!
In this article our sole endeavor is to picturise theproblems faced by assessees in getting the refund order as against the servicesspecified above. To represent the whole situation and to make it somewhatrhythmatic we have graced the article with humorous poems.
This is the last article of the prolonged series of articlesrestraining various issues involved in the refund claim mechanism underservices tax law. We hope the series of articles depicted the tangiblesituations faced by exporters under different services.
We will be back with new articles or their series, onvarious other current issues prevailing in the Indirect Tax regime. Yourvaluable comments and suggestions are welcomed on pradeep@capradeepja
Kind Regards,
CA PRADEEP JAIN, ( B.ComHons.,F. C.A.)
Address:
"Sugyan"
H - 29, Shastri Nagar, Jodhpur (Raj.)
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Phone No. : 0291-2439496, 2611496, 3258496
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