Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
(Service Tax Wing)

New Delhi, the 23rd May, 2013

Dr. Anupam Khanna

Chief Economist & Director General, NASSCOM,

International Youth Centre,

2nd Floor, Teen Murti Marg,

Chanakyapuri, New Delhi 110021

Subject: –   Documents submitted along with the refund claims under Rule 5 of CENVAT Credit Rules, 2004.


I am directed to refer to your meeting with Member (Service Tax), CBEC on 13.5.2013 on the above subject and her subsequent meeting with the departmental officers and to inform you that the following general deficiencies in the documents submitted along with the refund claims filed under Rule 5 of the CENVAT Credit Rules 2004, have been pointed out by the officers. These would have undoubtedly also been pointed out at the time of processing refund claims. Your members would also be aware of the same. With a view to resolving the issues to the extent possible, it would be appreciated if the suggestions given below are adhered to.

2.1   Foreign Inward Remittance Certificate (FIRC)

2.1.1 FIRCs submitted by the claimant are not invoice-specific or transaction-based and hence not co-relatable to export invoices. While it is accepted that invoice-specific or transaction-specific FIRCs are difficult in the services sector, the resultant non-submission of the correlation statement in terms of Board’s circular 112/06/2009-Service Tax dated 12-3-2009, delays the refund.

2.1.2     Even where the correlation statement is provided, the principle of first in first out as per accounting principles, is mostly not followed.

2.1.3 For FIRCs showing the purpose of remittance as advance, the export invoice correlated would be prior to the FIRC date. In some cases, the FIRCs are beyond one year from the date of export invoices, the relaxation of which is permissible only by RBI. However, copies of the relaxation by RBI are not furnished.

2.2        Suggestions

2.2.1     The FIRCs need to be certified or endorsed by the issuing bank/claimant with respect to the export invoices / transaction covered therein.

2.2.2   The FIRCs can also specify the purpose code as per RBI so that it is easily co‑relatable to the services exported and FIRCs received towards goods can be segregated.

3.1 Certificate from the Auditor

3.1.1 The certificate from the statutory officer is either not submitted with the claim or does not give complete certification with respect to proof of input service credit claim. The column of payment towards input service invoices does not carry accurate information as to how or what is the source document that the auditor has verified towards the payment made to the service provider to validate the credit claimed which is essential as per Rule 4(7) of the CENVAT Credit Rules, 2004.

3.1.2       The certificate does not carry the signature of the certifying auditor and only seals are affixed. It is also found that in some cases (for the period prior to 01-04-2012) the certifying authority is not the statutory auditor as mandated by notification 5/2006- Central Excise dated 14-3-2006.

3.1.3    The certificates carry various disclaimers stating that only a sample verification has been made and the certificate is issued based on information provided by the assessee which  does not give credibility to the certificate and warrants re-verification leading to further delays.

3.1.4 On sample re-verification of the certificates issued in many cases, it has been found that statutory auditors have certified ineligible credit and the credit is certified under wrong classification of services. The input services invoices have been found to bear the address of a non-registered premise or that not covered under the registration certificate of the claimant.

3.1.5 The certificates are found to certify input service credit amount which is at variance with the Form-A (Refund claim Form) and ST-3 return figures. This is apparently due to the delay in furnishing the statutory certificate along with the claim, in which case the claim could have been filed with the amount as certified by the Statutory Auditor.

3.2     Suggestions

3.2.1 It must be ensured that the use of input services is for the output services exported and not otherwise. The certificate issued should be complete in all respects and should have clear certification with no disclaimers. A point raised repeatedly by the field officers is that when the auditor is unwilling to give a clear cut certificate, it is debatable whether the sanctioning authority can be satisfied about the correctness of the claim. It is also to be emphasized that the certificate should be filed along with the claim and not subsequently.

4.1   Export Invoices and SOFTEX declaration

4.1.1 The export invoices are not in terms of Rule 4A of the Service Tax Rules, 1994 with respect to mention of the Service Tax registration number classification of services, issue of export invoices within one month from the date of completion of services, etc.

4.1.2 The SOFTEX declaration, if submitted, is not endorsed by the STPI authorities as proof of export of services rendered even after a year, which is when the refund claims are normally filed.

4.2     Suggestions

4.2.1 The export invoices need to be as per the provisions of Rule 4A of Service Tax Rules, 1994. It is to be emphasized upon the claimant and STPI authorities that endorsed SOFTEX declarations are furnished along with the refund claims.

5.1       CENVAT Credit

5.1.1 The claimant does not furnish the CENVAT credit ledger extract and even when furnished there is no clear indication as to any credit already claimed towards previous refund claims. It is incumbent upon the claimant-to show these figures as well as reverse the credit amount sanctioned as refund.

6.1       You are requested to kindly inform your members to ensure that the above deficiencies no not end up delaying the processing of the claims.

6.2 Further, in case any Commissionerate requires any assistance from a claimant in correlating documents in view of the voluminous documentation involved, you are requested to kindly advise your members to render the assistance so that the claim can be processed expeditiously.

Yours faithfully


(Himani Bhayana)
Under Secretary (Service Tax)
Central Board of Excise & Customs


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