Comments of GEA President on service tax notification
10 Oct '07
3 min read
Comments of Mr. G.S.Madan, President, GEA on service tax notification: Garments Exporters are disappointed, with the Notification No.41/2007 Service Tax dated 6th October, 2007 of the Ministry of Finance, Department of Revenue, providing refund of Service Tax paid by exporters on services provided by an Insurer, Technical Testing and Analysis Agency, Inspection and Certification Agency.
The Notification No.40/2007 Service Tax dated 17th September, 2007 of the Ministry of Finance, had earlier provided refund of Service Tax paid by exporters on Port Services provided for export, services of transport of export goods by road from ICD to port of export by Goods Transport Agency and services of transport of export goods in containers by rail from ICD to port of export.
However, the refund has not been provided on a number of other important services on which Service Tax is being paid by exporters but they are still outside the preview of the Notifications, only limited relief to the exporters.
The relief is limited to few services and therefore, very much short of our expectations as well as recommendations earlier announced by the Ministry of Commerce. It also does not neutralize the adverse impact of sharp appreciation in the value of rupee of over 11 percent which has seriously eroded the profitability of exporters.
The Government's policy has been not to export taxes and duties but only goods and services. Charging Service Tax on exports leads to export of taxes which should be exempted in full.
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