We are a 100 per cent Export Oriented Unit (EOU) engaged in providing Business Process Outsourcing (BPO) Services. During the course of business, we procure goods from domestic tariff area (DTA) for various operations. In this context, we have come to know that we are eligible for reimbursement of Central Sales tax (CST) paid on purchase of goods. Please clarify, whether we are eligible for such reimbursement even though we are unable to issue Form C.
As per the Foreign Trade Policy, reimbursement of the CST paid on interstate purchases of goods from DTA is available to EOUs provided, the goods are intended to be used for specified purposes in relation to export of services by the EOU. Further, in the case of certain specified service providers like BPOs it has been clarified that such service providers are not required to produce ?C? Forms in order to claim refund of the CST.
I am an insurance agent working for a famous General Insurance Company and receive payments by way of commission based on the insurance policies sold by me for the company. Does the commission received attract Service tax liability?
Yes, these services come under the purview of the taxable category of ?Insurance Auxiliary Services?. However, the person liable for paying the Service tax in relation to insurance auxiliary services by an insurance agent is ?any person carrying on general insurance business in India?. In other words, the insurance company, which has appointed the licensed insurance agent, is the person liable to pay Service tax. Hence, the liability to deposit Service tax is on the General Insurance Company who has appointed you as its licensed insurance agent.
We are a recently set up company situated in a Special Economic Zone (SEZ). During the course of the business, we procure services for various operations. In this context, we understand that we are eligible for refund of service tax paid on the input services. Please put some light on above that whether the refund is available for the services consumed in SEZ or outside as well.
Notifications have been recently issued in this regard. Exemption from Service tax is now available to the services used in relation to authorized operations and consumed wholly within the SEZ, without following the refund route. The exemption by way of refund would be available when taxable services provided to a unit in SEZ are not consumed wholly within the SEZ.
We are a fasteners manufacturing company and use various inputs and capital goods during the manufacturing process. However, certain capital goods utilized in the manufacturing process are manufactured in-house using duty paid inputs. Accordingly, please clarify that whether the input used in manufacture of the capital goods, which in turn are used in manufacture of the final products are eligible for CENVAT credit.
The CENVAT credit rules have a specific definition of ?capital goods? and hence, only those goods which are covered by the aforesaid definition would qualify as ?capital goods? for the purpose of CENVAT credit rules. As per these credit rules, credit of the duty paid on inputs which are used in the manufacture of ?capital goods? which are further used in the factory of manufacturer for manufacture of dutiable goods can be availed.
?Respondents are senior professionals at Ernst & Young. The replies do not constitute professional advice. Neither E&Y nor FE are liable for any action taken on the basis of these replies.