The Commerce Department has prepared a proposal for addition in the upcoming Union Budget, seeking service taxes relief for the cash-strapped export section in the country. The proposal elaborates on the need of exempting exporters from paying taxes on services availed by them during their business, instead of permitting these to file a return as proof.
Presently, exporters are permitted to claim refunds right after paying the service taxes. The tax rate is set at 10% of the worthiness of the service availed. If you want to know more details regarding the same, you can also visit https://www.goodservicetax.com/.
Exporters generally use services such as financial services, general insurance, port services, transportation of goods by road or rail, technical testing and examination, storage space and warehousing, business exhibition services and specific cleaning services.
According to the Finance Ministry, the procedure of taxes refunds helps the ministry to screen the claims created by exporting residences. However, the Business Department has advised that providing a blanket exemption on taxes to exporters and requesting them to document ago back for the exemption availed will be a far better practice than the procedure of refunding taxes paid on certain services.
"The existing process of proclaiming refunds on taxes paid is time-consuming and quite cumbersome. Often, the refundable amount gets locked with the federal government, thereby lengthening the process.