Exporters to get tax refund on 3 new services

[Sukumar]

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.