Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT RATES :: TDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: due date for vat payment :: cpt :: form 3cd :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit
« Service Tax »
 Benefits of GST to home buyers In the next lifetime
 GST: Jaitley says yes to cess, no to additional tax for compensating states
 GST to enhance ease of doing business, says Assocham
 Govt sources say cess is a better option than high tax rate
 Goods and Services Tax: There should not be more than three grades of rates, says Chidambaram
 Chidambaram says there cannot be multiple tax slabs in GST
 Service tax officials transferred for favouring realtor
 GST, a challenge and opportunity for accounting professionals’
 Service Tax On Hotels And Restaurants – Recent Delhi High Court Judgment
 GST Council discusses 4-tier tax rate, cess on demerit goods
 Why you shouldn’t miss these three simple tax saving options beyond Section 80C

Service exporters hit by sudden halt in tax refunds
October, 19th 2012

Software exporters, BPOs, consultants and other service exporters have been hit by a sudden halt in service tax refunds in the past few months. Service tax commissionerates across the country have been rejecting tax refund claims of these companies, which also include knowledge processing outsourcing firms and financial advisors, in the absence of clarity on aspects relating to input-cost credits.

As per service tax rules, input cost credits are chargeable on 'input services' used by companies (i.e. service exporters) for offering the service. The rule allows exporters to recover service tax paid on indirect costs to the company. Input services include expenses on installation of new office computers, catering services to employees, auditor or advisory services , couriers, event management, employee transportation, office rentals, manpower supply commission, leased communication lines, security, computer maintenance and annual office maintenance cost.

"Our refunds were coming till about four months ago. But our recent service tax refund submissions are not being entertained by commissioners. They are asking us frivolous questions with regards to our input-cost credits ," said a senior official of a leading BPO. As a concept, indirect taxes are levied on goods and services and recovered from consumers . However, if such a service is not consumed within the same country from where it originates, laws exempt exporters from taxes and also enable them to obtain refunds on procuring input goods and services that are used in such exported goods and services.

Service tax refunds have become very important to these companies as they are witnessing a downtrend in revenues due to the financial crisis in the West. "We are being asked to produce proof of nexus between input services and output services, despite producing the auditor's certificate certifying the nexus," said a senior auditor with a large IT firm. "Some times we are even asked to produce proof of export -- that the services are used and enjoyed outside India," the auditor said. Mumbai, Hyderabad, Pune and Bangalore are some of the commissionerates where service tax refunds have not been allowed, said tax consultants. "It is unfortunate that revenue authorities are coming out with frivolous grounds to reject the rightful claim of exporters at a time when exporters are reeling under the financial crisis in the western markets," said Sachin Menon, partner & national head - indirect tax, KPMG. "It is surprising to see that there is no logical approach in rejecting claims.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions