Exporters can claim tax refund on goods & service inputs

NEW DELHI: The finance ministry has amended the Cenvat Credit Rules ���04. The amendment will allow exporters to claim refund of taxes paid on inputs used in manufacture of goods or in providing a service.

The move will provide significant relief to exporters who have been unable to claim refund on taxes paid on inputs.

Although present rules permit refund, the procedure is difficult. Many exporters choose not to claim the refund at all. These taxes are added to the total cost of exports.

The new rules notified on Thursday require that products or services are exported in accordance with procedures laid down in the Central Excise Rules, ���02 or the Export of Services Rules, ���05.

Refund is allowed only when a manufacturer is not in a position to utilise input credit or input service credit allowed against goods exported during a quarter or month to which the claim relates.

The refund of unutilised input service credit is to be restricted to the extent of export turnover to the total turnover for a given period to which claim relates.