Exporters to get tax refund on 3 new services

The finance ministry today extended the service tax refund scheme for exporters to three more services, but stopped short of including 14 other areas for a similar relaxation.

With this move, 13 services used by exporters have been made eligible for refund of the tax liability.

The service tax on goods transportation agencies and transport of export consignments by rail containers to sea ports, airports and inland container depots has been made eligible for refund to exporters.

In addition, exporters will also get a refund on the service tax paid on courier services used by them to transport goods and documents.

Service tax is levied at the rate of 12 per cent plus a 3 per cent cess, taking the total incidence to 12.36 per cent.

The relaxation on service tax, which account for up to five per cent of the freight-on-board (FoB) value of export consignments, is aimed at cushioning losses of exporters hit by the 12 per cent annual appreciation in the rupee.

Commerce Minister Kamal Nath had announced exemption and refund of service tax for exporters while releasing the annual supplement to the trade policy in April, 2007.

The finance ministry has made 10 services eligible for service tax refund in announcements made in July, October and November as part of export relief packages. These include service tax paid on port, general insurance and business exhibition services.