CBEC issues guidelines for speedy disbursal of pending refund claims to exporters of services

CA Bimal Jain

The Central Board of Excise and Customs (CBEC or the Board) vide various Circulars/Instructions had laid down simplified procedures for sanction and disbursal of refund claims in the past under various notifications.

Now, the Board has issued yet another circular in order to facilitate fast track sanction of refund of accumulated Cenvat credit to exporter of services vide Circular No. 187/6/2015-Service Tax dated November 10, 2015  (the Circular).

Gist of the scheme for speedy disbursal of pending refund claims to exporters of services:

We are summarising herewith the gist of scheme issued vide the Circular for ease of understanding:

♣ Applicability of the scheme: It is applicable to Service tax registrants, who are exporter of services, with respect to refund claims under Rule 5 of the Cenvat Credit Rules, 2004 (“the Credit Rules”), which have been filed on or before March 31, 2015 and which have not been disposed of as on date of the issue of the Circular.

Further, refunds which had been finalized earlier by issuance of an adjudication order but have been remanded back to the original sanctioning authority will not be covered under this scheme since re-examination of such claims will have to be done strictly in terms of the remand order of the Commissioner (Appeals)/ CESTAT/ High Court.

♣ Additional documents to be submitted:In addition to the specified documents required to be filed along with the refund claim, the following are the additional documents need to be submitted:

1. A certificate from the statutory auditor in the case of companies, and from a Chartered Accountants in the case of assessees, who are not companies, in the format as given in Annexure-1 to the Circular.
2. An undertaking from the claimant in the format as given in Annexure-2 to the Circular.

♣ Operation of the scheme: On receipt of the additional documents in respect of pending claims, the Jurisdictional Deputy/Assistant Commissioner will give a dated acknowledgement to the claimant. Thereafter, he will make a provisional payment of 80% of the amount claimed as refund, within 5 working days of the receipt of the documents. Further, the Board has prescribed other procedures as well for effective operation of the scheme.

♣ Monitoring and reporting: The claimant shall be required to submit an MIS report in the format specified in Annexure-4 to the Circular by the 10^thof every month by email to st-cbec@nic.in.

Further, Principal Commissioners/Commissioners should ensure that the provisional payment of refunds should be done strictly in terms of the time lines specified and that there should be no complaints regarding delays of refund.

To access the complete Circular, please click on the link below:

https://taxguru.in/service-tax/scheme-speedy-refund-accumulated-unutilised-cenvat-credit.html

Our Comments:

It is to be seen that how strictly the Circular will be followed by the concerned Authorities as in past also number of such Circulars has been issued but unfortunately, not adhered to by the Authorities. Further, the Circular only addresses grievances of exporter of services facing delay in refund under Rule 5 of the Credit Rules. But, what about manufacturer exporters who are also circumscribed with similar delays in refund? Hopefully, the Board will address their concerns as well by extending the instructions given in the Circular to manufacturer exporters also.