•I am a practicing litigation lawyer. I came to know that the finance minister has made legal consultancy services liable to service tax. Please advise whether I would need to take service tax registration and deposit service tax?

?Legal consultancy services? provided by a business entity to another business entity (which has been defined to include an association of persons, body of individuals, company or firm and does not include an individual) have been brought under the ambit of service tax. However, any service relating to appearance before any court, tribunal or authority has not been included in the ambit of service tax.

Therefore, litigation services provided by you should not come under the purview of ?legal consultancy services?. However, if you provide legal advice or consultancy, you could be liable to service tax depending upon the status of your firm.

•We are exporters of goods and claim refund of service tax paid by us on input services (under Notification No 41/2007, dated October 6, 2007). We have heard that the refund procedure has been amended in Budget 2009. Please advise on the changes in refund procedure?

You are correct that the scheme for exporters claiming refund under Notification 41/2007 has been simplified. ?Terminal handling charges? have been included in the list of eligible services. The major changes made in the refund procedure are provided below:

• The time period for filing refund claim has been increased from six months to one year from the date of export. Further, the condition for filing refund claims on quarterly basis has been removed and the exporter can file a refund claim anytime after export.

• Where the total refund claim does not exceed 0.25% of the total FOB value of the exports, refund to be granted based on a self-certificate by the exporter. In other cases, refund to be granted based on a certificate from a chartered accountant.

•The refunds shall be granted within one month without any pre-audit.

Further, for the following categories of services, service tax exemption has been provided subject to specific conditions (in such cases, exporters need not pay service tax and claim a refund):

• Transportation of goods by road, from the place of removal to any ICD, CFS, port or airport or from any CFS or ICD to the port or airport;

• Commission paid to foreign agents (exemption up to 1% of FOB value).

•We are importers of garments and get clearance for home consumption after payment of appropriate customs duty. Sometimes the garments imported by us are found to be defective. Please advice whether we can claim a refund of duty paid on such defective garments.

Finance Bill 2009 has provided for refund of customs duties on imported goods, if the goods are found to be defective or not confirming to the specifications agreed between the buyer and the seller, subject to specified conditions. Such a refund would be available only if the importer either exports the goods or relinquishes the title and abandons them to the customs or if the goods are destroyed, so that they become commercially valueless.

•We are an Indian subsidiary of a US-based company. We deposit service tax as a service recipient under reverse charge mechanism on the services received from our parent company. Please advice whether we can avail cenvat credit in respect of such services at the time of deposit of service tax, even if the payment is not made by us to our parent company towards services received.

As per the cenvat rules, credit in respect of input service is allowed on or after the day on which the payment is made of the value of taxable service and the service tax thereon. In relation to an associated enterprise, payment received towards a taxable service includes any amount credited or debited in the books of account of a person liable to pay service tax. Such a debit or credit should also be viewed as a payment made for the taxable services for cenvat credit purposes also.

Therefore, cenvat credit should be available after service tax has been deposited on such a transaction as a service recipient, even if payment has not been made towards the service value to the parent company.

Further, where the service tax liability arises on a service recipient (under the reverse charge mechanism) in case of import of services, cenvat credit can be availed by the service recipient on the basis of challans evidencing the deposit of service tax. Therefore, your company should be able to avail cenvat credit after the deposit of service tax, even if the actual payment is not made to your parent company.