We have claimed refund of service tax paid on services used in the course of exports under notification no. 41/007-ST dated 6th October 2007. Our claims are held up for want of original documents such as invoice, bill of lading, bank realisation certificate etc. How can we give original bill of lading when the same is sent to buyers abroad? The original bank certificate has to be given to licensing authorities. Do we have a way out?
The CBEC Circular no.112/06/2009-ST dated 12th March 2009 clarifies that normally certified copy of the documents should be accepted. Only in case of in-depth enquiry original documents can be verified. This should help. But I do believe that everyone – the law makers, the tax payers, consultants, courts etc. - is on a learning curve as for as service tax matters are concerned. So, such difficulties will continue.
The peak excise duty rate on items has been reduced from 16% to 14% in the last budget. Thereafter, the rate went down to 10% on 7th December 2008 and further to 8% with effect from 24th February 2009. But, has the amount of 10% of the value payable under Rule 6 (3) of the Cenvat Credit Rules, 2004 been reduced and if not, what is the reason?
The said Rule refers to the amount payable by manufacturers of dutiable and non-dutiable goods who opt not to maintain separate records but want to take Cenvat Credit on all common inputs. They have the option to pay 10% of the value of non-dutiable goods or reverse the proportionate Cenvat Credit based on the formula given in Rule 6(3A). The 10% rate has not been reduced. In my opinion, it should have been reduced to say around 6% and then 5%. I do not know why it has not been done.
Perhaps, the Government feels that most manufacturers might have procured inputs at higher duty or might have an option to go for the prescribed formula. I am not convinced if that view has any merit as the option has to exercised at the beginning of the year and there is no need to presume that the manufacturers have stocks of inputs that have suffered higher duty.
Our refund claim of 4% additional customs duty under notification no. 102/2007-Cus. dated 14.09.2007 is held up as the department alleges that we have not paid VAT on re-sale of the goods but have only adjusted the input tax credit that we had. Please guide.
When VAT legislation allows payment by utilizing the input tax credit, the Customs need not insist on how you should discharge the VAT liability. The CBEC has, in its circular no. 16/2008-Cus. dated 13.10.2008, said that a certificate from statutory auditor/chartered accountant correlating the payment of VAT on the imported goods with the invoices of sale, along with supporting documents of proof of payment of appropriate VAT is acceptable for the purpose of 4% CVD refund.
