Tax :: Refund of Service Tax Issues & Challenges

Service Tax, because the name suggests is a tax leviable in almost all duties. That is actually a tax levied around the transactions in the facility specified by the Central Government below the actual finance Act, 1994. That is an indirect tax (akin to become able to Excise duty as well as sales tax), this means the particular company pays your tax as well as recovers the actual quantity from your people receiving your taxable work.Service Tax is actually usually recovered by simply Assessee inside 2 ways:Simply By utilizing the same as in the type of Cenvat Credit, orSimply By Claiming the particular Refund.Any Assessee can easily utilize the amount associated with duty paid simply by him in excess by simply adjusting exactly your same with just about all the duty quantity compensated throughout subsequent period. Refund regarding tax may be claimed by simply Assessee where self- adjustment involving Support Tax just isn't feasible. Refund of Services Tax typically happens in case involving export oriented companies (STPI, SEZ, EOU units) which usually export his or her final product/duty, as no tax will be levied through Government to promote the actual export. Such companies disburse excise on the input/output help procured by all of them nevertheless are not able to utilize the actual Cenvat Credit Rating since simply no thanks can be received by these people upon export of their services. Because the result, such companies have to opt your procedure associated with claiming refund for unutilized cenvat (tax) credit. - business help and advice - The Export Oriented Units, particularly the STPI units are already facing many hurdles along with problems while claiming the services tax refunds. Generally there have been inordinate delays towards the particular scrutiny involving refund apps coupled together with rejections in the claimed amounts because of to numerous reasons from the designated authorities, main reasons being:Period Limitation for the refund claim of duties.Relevant date for the calculation associated with limitation period involving time inside respect involving filing your refund claim.Implication in the Principle involving Doctrine of Unjust Enrichment.Submission of separate Foreign Exchange Remittance Document (FIRC) in the actual event involving segregated export associated with items & utilities.Submission associated with Original documents like Invoice, BL, SB, BRC etc.The Central Board involving Excise & Customs can be seized of this issue along with may be regularly clarifying on this issue through various clarifications/Notifications covering many procedural issues with respect for you to refund associated with support tax paid. The idea provides settled many problems like the time within that the particular refund declare shall be filed, acceptance associated with certified photocopies as a valid document, submission associated with self-certified statement along with FIRCs etc.Despite numerous initiatives taken by the department, there continues in order to be a huge pendency regarding tax refunds primarily simply because in the incomplete documentation through the claimants, tedious procedure for physical verification associated with documents submitted to the department and the distinction involving perception between your claimant and the department relating to the actual admissibility regarding input solutions entitled to refund.There are numerous specialized Services Tax Specialist throughout Delhi, NCR that helps companies throughout sorting out the problems they will face associated to end up being able to tax. However it is usually advisable to accomplish some serious analysis just before getting in contact with the STPI Specialist throughout - - Delhi.