We are a call centre servicing foreign companies. We have applied for the refund of Cenvat credit lying in our books of accounts, but have not yet received the refund. We understand that recently, the service tax department has issued a circular regarding the refund of such credit. Please clarify.
You are correct that the Central Board of Excise & Customs has issued a clarification (vide circular no. 120/01/2010-ST, dated January 19, 2010) to ease the problems faced by exporters in availing refund of excess Cenvat credit under notification no 5/2006 ?CE (NT). The primary points clarified in the circular are:
* For claiming refund of accumulated unutilised Cenvat credit, there is no need to establish direct nexus between the input/input services and export as long as the same qualifies as input/input service within the meaning of Cenvat Credit Rules, 2004;
* The procedure for filing a declaration as prescribed in notification 17/2009?ST (under which exporters of goods can claim refund of service tax paid on specified services) for correlation between input and output has been suggested to be followed in case of refund claims filed under notification no. 5/2006;
* Since the refund claim is to be filed on a quarterly basis. In case there is no exports in a particular quarter, the credit may be carried forward to the next quarter and the refund claim be filed in that quarter;
* In case of incomplete invoices, a liberal view should be taken and refund be allowed if there is nexus of input/input services with the exports.
We are a trading company engaged in exports. We wish to establish a unit in Gurgaon under the export-oriented unit (EOU) scheme. Please advice on the matter.
The Foreign Trade Policy provides that trading units are not allowed to be set up under the EOU scheme. Trading units were permitted under the EOU scheme prior to March 31, 2002. At the time of the change, trading units in existence prior to March 31, 2002 and which had a valid letter of permission (LoP) for trading are allowed to continue to operate under the EOU scheme. However, such trading units were not given further LoP extensions.
Thus, your company won?t be able to establish a trading unit under the EOU scheme. You could examine the possibility of setting up a unit in a free trade and warehousing zone provided that you meet all the requirements.
We are a service provider registered under the Served from India Scheme (SFIS) of the Foreign Trade Policy. We have imported certain capital goods and have paid the additional customs duty by debiting the duty script obtained under the SFIS. We wish to know whether Cenvat credit can be availed for the additional customs duty on the import.
Under SFIS, service providers are entitled to a credit scrip of 10% of foreign exchange earned in the preceding financial year. The credit scrip can be used for procurement of capital goods including spares, office equipment and professional equipment, office furniture and consumables used in the business of the service provider.
The credit rules are silent on the issue of whether credit can be availed of capital goods imported under SFIS licence. However, chapter 3 of the Foreign Trade Policy specifically stipulates that additional customs duty/ excise duty paid in cash or through debit under the duty credit scrip shall be adjusted as Cenvat credit or duty drawback, except under SFIS.
We understand that the implementation of the goods & service tax has been delayed and the same would not be implemented from April 1, 2010. Please let us know when it is expected to be implemented.
You are correct that there is a delay in the implementation of the GST. The report of the task force of the 13th Finance Commission suggested that on account of lack of adequate preparedness, it would be appropriate to postpone the date of implementation of the GST to October 1, 2010.
We understand that there is still discussion going on among central and state governments regarding GST. So, the date for its implementation is not yet set.
?Respondents are senior professionals at Ernst & Young. The replies do not constitute professional advice. Neither EY nor FE is liable for any action taken on the basis of these replies