EPCs and FIEo exempted from Service Tax

The Export Promotion Councils (EPCs) and the Federation of Indian Export Organisations (FIEO), will be exempted from service tax on the membership and other fees collected by them till 31st March, 2010. This was announced by Shri Pranab Mukherjee, Union Finance Minister, in the General Budget today.

Two taxable services, namely, 'Transport of goods through road' and 'Commission paid to foreign agents' will be exempted from the levy of service tax, if the exporters is liable to pay service tax on reverse charge basis. However, present cap of 10% on commission agency charges is retained. Thus, there would be no need for the exporter to first pay the tax and later claim refund in respect of these services. For other services received by exporters, service tax exemption will be operated through the existing refund mechanism based on self-certification of the documents where such refund is below 0.25% of FOB value, and certification of documents by a Chartered Accountant for value of refund exceeding the above limit.

Source : Equity Bulls

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