The finance ministry today extended the service tax exemption for exporters in three more services but stopped short of including 14 other sectors. With this move, 13 services have been made eligible for refund, which, according to exporters, is short of their expectations.
Service tax levied on goods transportation agency and transport of export consignments by rail containers to sea ports, airports and inland container depots have been made eligible for refund to exporters. In addition, exporters will also get a refund on the service tax paid on courier services used by them to transport goods as well as documents.
Service tax is levied at the rate of 12% plus a 3% cess taking the total incidence to 12.36%.
The relaxation on service tax, which constitute up to 5% of the FOB value of export consignments, is aimed at cushioning the losses of exporters who have been hit hard by the 12% annual appreciation of the rupee.
Commerce Minister Kamal Nath had announced exemption of service tax for exporters while releasing the annual supplement to the trade policy in April 2007.
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