Government starts automatic service tax refund for exporters

NEW DELHI: Streamlining the procedure for service tax refunds for exporters, government today linked it with electronic payment system and fixed the average rate at 0.03-0.2 per cent of the shipment value.

Exporters will be allowed automatic refund of service tax as the refund system has been synchronised with the Electronic Data Interchange (EDI).

"The average rate of refund is in respect of 18 identified services used beyond the factory gate. This is being done to implement the simplified scheme," the Finance Ministry said in a statement.

Chairman of Central Board of Excise and Customs (CBEC) S K Goel said "there will be automatic refund once exporters file the shipping bill and they made the required declaration."

Industry body FIEO welcomed the initiative stating it would save both transaction time and cost.

"If Government continues to act in such proactive manner, we will sail through smoothly in difficult 2012 when our exports will be facing numerous challenges," FIEO President Ramu S Deora said.