CBEC vide its Circular 187/6/2015-Service Tax dated 10-11-2015 formulated a Scheme for Speedy grant of refund of accumulated and unutilized CENVAT Credit for Exporters of Services to help in unlocking the accumulated credit.

Exporters of services today accumulate CENVAT credit on both input services and input goods as they are unable to set-off their input levies. It is proposed that speedy grant of refund of accumulated & unutilized CENVAT credit will help in ease of doing business by unlocking the accumulated credit.

Central Board of Excise &Customs ( CBEC ) has declared this year (FY 2015-16) as the “Year of Tax Payer Services”. In order to enable speedy grant of such refunds to the exporters of services, a scheme has been formulated whereby on submission of a certificate from the statutory auditor/Chartered Accountant as well as the claimant, a provisional payment of 80% of the claimed amount will be made within 5 working days.

Salient Features of Scheme are as under:

Applicability of the scheme

  1. This scheme will be applicable to all refund claims which are pending as on 31-3-2015 and have not been disposed of by way of a sanction order.
  2. 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.

Document required to be submitted:  

  1. A certificate from the statutory auditor in the case of companies, and from a chartered accountant in the case of assessees who are not companies, in the format given in Annexure-1. (Find in below Circular)
  2. An undertaking from the claimant in the format given in Annexure-2. (Find in below Circular)

Operation of the scheme

  1. On receipt of the application with above documents in respect of pending claims, the jurisdictional Deputy/Assistant Commissioner will give a dated acknowledgement to the claimant. He will then make a provisional payment of 80% (eighty per cent) of the amount claimed as refund, within five working days of the receipt of the documents.
  2. The letter intimating the provisional payment should be in the format given in Annexure-3 (Find in below Circular). It is clarified that this payment of 80% of the refund amount shall be purely provisional, based on the documents above and without prejudice to the department’s right to check the correctness of the claim in terms of the relevant notification and recover any amount which has been provisionally paid. It is also clarified that the decision to grant provisional payment is an administrative order and not a quasi-judicial order and should not be subjected to review.
  3. After making the provisional payment, the jurisdictional Deputy/Assistant Commissioner shall undertake checking the correctness of the refund claim in terms of the relevant notification.
  4. During the course of verification, it may appear that a part of the amount claimed as refund is inadmissible. In such cases, a show cause notice (SCN) has to be issued asking the claimant to show cause why the inadmissible amount should not be denied and wherever relevant, why any amount which has been provisionally paid should not be recovered. However, prior to the issuance of such a SCN, the claimant may be intimated about the inadmissible amount so that he has an opportunity to avail of the provisions of section 73(3) of the Finance Act, 1994. A speaking, appealable order will have to be passed with respect to the SCN. This order will be reviewed by the Jurisdictional Commissioner.

Download Complete CBEC Circular 187/6/2015-Service Tax dated 10-11-2015


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Refund of Accumulated CENVAT Credit to Exporters of Services

Refund of Accumulated CENVAT Credit, Refund to Exporters of Services

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