With the mandate to improve ease of doing business in India; the Central Board of Excise & Customs has notified Circular No 187/6/2015-Service Tax dated 10 November 2015 (Circular) directing speedy disposal of pending refund claims.

Who can avail benefit of this scheme?

Exporters of services who have filed claims for refund under Rule 5 of the CENVAT Credit Rules, 2004 on or before 31 March 2015 and whose claims for refund have not been disposed of as on date are eligible to claim the benefit under this Circular. The scheme in the Circular does not cover refund claims which have been remanded to the original sanctioning authority.

Are any further documents required to be filed?

Two documents are required to be filed under this scheme.

  • A company needs to file a certificate issued by the statutory auditor. In respect of assessees other than a company, a certificate issued by a Chartered Accountant is required. Formats for this have been prescribed in the Circular.
  • An undertaking from the claimant in the format as prescribed in the Circular.

How does this scheme work?

On receipt of the documents noted above, the concerned officer shall sanction 80% of the refund amount claimed provisionally within a period of 5 working days. A letter will also be issued to the claimant indicating that such sanction is purely provisional.

Thereafter, if a part of the claim is found to be inadmissible, it shall be adjudicated by means of a Show Cause Notice.

Comment

The Circular grants a major reprieve to service exporters. Facilitating disbursement of claims provisionally will also encourage further export of services from India. This is a positive step taken by the Central Government, further cementing the commitment towards ease of doing business.