By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether for the purpose of claim of refund, export of services is completed on the date of export of services or the date of receipt of convertible foreign exchange? Held, Date of receipt.
Facts:
The appellants, Consulting Engineer export services under the provisions of the Export of Services Rules, 2005. The appellants filed applications for refund of service tax on input services used from July, 2005 to September, 2005 during various dates vide Notification No. 5/2006-ST dated 1st March, 2006. The claim was rejected on the ground that it was not filed in accordance with section 11B of the Central Excise Act, 1944 and that Rule 5 of the CENVAT Credit Rules, 2004, dealing with refund of service tax, was made applicable to service providers only with effect from 14th March, 2006.
Held:
Section 11B of the Central Excise Act, 1944, prescribes relevant date for refund of export as the date of export. Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-ST dated 1st March, 2006 provides for refund of service tax, provided the output service is exported and payment is received in convertible foreign exchange. Having regard to the Export of Services Rules, 2005, export of services is completed only when amount is received in convertible foreign exchange and therefore, relevant date u/s.11B of the Central Excise Act, 1944, to be considered would be the date when payment was received. In the present case, since all refund applications were filed within one year from the date of receipt of convertible foreign exchange, the claim was held not to be time barred.
