Panel to look into service tax circulars

When in doubt, call in the experts. This appears to be the mantra of the central board of Customs and excise as it has asked former taxman TR Rustagi to analyse all circulars and instructions issued for service tax since 1994, when it was first introduced.

The one-man committee, to be notified soon, is likely to be asked to submit its recommendations within two months.

"We will soon notify the setting up of the committee. The intention is to weed out all the redundant circulars and instructions since the law has been changed several times since 1994," R Sekar, joint secretary (Tax Research Unit) in the finance ministry said at a seminar on service tax organised by PHDCCI.

This would be the second attempt by the revenue department to simplify its circulars. An exercise had been initiated by the directorate of service tax last year under service tax Director General KP Singh.

Sekar said the revenue department had written to the commerce ministry to examine a refund mechanism for costs incurred by exporters in their post-manufacture activities or business promotion expenses.

"We have received representations from exporters, asking if the costs incurred in hiring agents overseas for identifying prospective buyers can be refunded. There's is a legitimate concern. We have written to the commerce department to find a refund mechanism under the various export reimbursement schemes," Sekar said.