Our bank has frozen our payment, received in foreign exchange from clients abroad against our export through electronic mode, for our service of converting old illegible drawings to autocad drawings, on the grounds that we did not file Softex forms. Is the bank correct and, if not, what recourse do we have?
As per Regulation 3(1) of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, the Softex declaration form has to be filed for export of software other than in physical form — i.e. magnetic tapes/discs, and paper media. Regulation 3 (3) of the said regulations is explicit that in respect of other services, no declaration is required. Therefore, you may approach the higher authorities or the ombudsman of the bank, or the consumer court, with your grievance for due relief.
Notification no. 25/2012-ST dated June 20, 2012 exempts ‘carrying out any intermediate production process as job-work in relation to any goods on which appropriate duty is payable by principal manufacturer’. In this context, does appropriate duty include ‘nil’ rate of duty, i.e. if the goods of the principal manufacturer are subject to ‘nil’ rate of duty, can the job-worker avail the exemption of the said notification?
Para 2 (b) of the said notification says ‘appropriate duty’ means duty payable on manufacture or production under a Central Act or a State Act, but shall not include ‘nil’ rate of duty or duty wholly exempt.” Therefore, the job-worker is liable to pay service tax, if the goods of the principal manufacturer are subject to ‘nil’ duty.
We have diverted goods cleared for export under UT-1 to the domestic market after 180 days upon payment of excise duty and interest. Can we take Cenvat Credit of duty paid without any permission?
If you have received the duty paid goods in your factory, you can take Credit under Rule 16 of the Central Excise Rules, 2002 without any permission. If you have straightaway diverted the goods, your customers can take the credit on the basis of your invoice after receipt of goods in their registered premises, subject to other eligibility criteria.
We have an independent private blood bank that collects cord blood at the time of delivery of the child at a hospital or clinic, tests it for infectious, transmissible diseases and processes the sample at laboratory, cryopreserves the sample and, when required, retrieves the cryopreserved sample for delivery to hospitals for use in treatment of blood/hematological disorders, immune deficiencies, metabolic disorders, etc. Is the service exempt from service tax as ‘health care services’?
As per Para 2(f) of the notification 25/2012-ST dated 20.6.2012, “health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India….” Since the blood bank does not offer any services covered in the said definition, in my opinion, the exemption is not available. However, I suggest that you represent your case to the government for exemption.