With a major part of exporters’ woes subsiding thanks to the strengthening dollar, exporters now have some more reason to cheer. The finance ministry has extended service tax refund to three more export-related services. This will take the total number of such services to 19.
Exporters will now get tax refund on services provided in relation to sale and purchase of foreign currency under banking and other financial services as well as under foreign exchange broking services from May 16. Service tax refund is also available on the supply of tangible goods, where the right of possession and effective control is not transferred. This will be treated as export if the goods are located outside India during the period of their use by the recipient.Online GST Certification Course by TaxGuru & MSME- Click here to Join
The Central Board of Excise and Customs (CBEC) has also introduced an optional scheme for service tax payment on purchase or sale of foreign currency (including money changing). Service tax will be levied on this from May 16.
“Where the consideration (commission) for the services provided in relation to purchase/sale of foreign currency is not explicitly indicated, the person liable to pay service tax has been given the option to pay service tax calculated at the rate of 0.25% of the gross amount of currency exchanged,” the CBEC has said.
The ministry has also notified levying of service tax on information technology, software services, investment management services under unit-linked insurance plan, internet telecommunication services and services provided by stock exchanges, commodity exchanges and clearing houses as was announced by finance minister P Chidambaram in Budget 2008-09. The notification follows President Pratibha Patil giving her assent to the Finance Bill on Saturday.