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F. No. 137/17/2007-CX.4
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)
New Delhi, dated the 23rd May,
2007
To,
The Chief of Protocol,
Ministry of External Affairs,
South Block
New Delhi-110001
Sir,
Sub:- Procedure for granting exemption from service
tax to taxable services provided to foreign missions/ consulates and to
the personnel posted there in India --reg
Please refer to discussions held on the above
subject between the Department of Revenue and the Ministry of External
Affairs. Presently 'service specific exemptions' are available to certain
specified foreign missions/ consulates (vide notification Nos. 5/96-ST,
10/96-ST, 44/98-ST, 50/98-ST, 51/98-ST and 1/2001-ST), while for UN and
other International Organizations a general exemption is available under
Not. No.16/2002-ST. It was observed that the present service tax exemption
scheme to foreign missions/ consulates and their personnel is selective
and is not flexible enough to be useful for negotiations with other
countries, to the extent of providing or modifying the tax concessions on
reciprocal basis. It was also noted that a relatively flexible exemption
system is available in respect of excisable goods vide serial No. 81 of
Notification No. 6/2006-CE dated 1/3/06, and therefore, it may be
preferable to modify the service tax exemption scheme in the same pattern.
02. The issue has been further examined and it has
been decided to prescribe the scheme for service tax exemption in similar
lines to the excise exemption, with required modifications. The scheme
would now operate through two notifications, which would come into effect
from 23.5.2007. Notification No 33/07-ST dated23.5.2007 exempts all
taxable services provided to foreign diplomatic missions or consular posts
in India for their official use, while notification No. 34/07-ST dated
23.5.2007 exempts all taxable services provided to diplomatic mission
agents or career consular officers posted in a foreign diplomatic missions
or consular posts in India for their personal use. The conditions to be
followed and the procedure to be observed for availing these exemptions
are detailed in the following paragraphs.
3 SCHEME FOR SERVICE TAX EXEMPTION ON ALL TAXABLE SERVICES PROVIDED
TO FOREIGN DIPLOMATIC MISSIONS OR CONSULAR POSTS IN INDIA FOR THEIR
OFFICIAL USE.
3.1 CONDITIONS: The exemption would be
available on the taxable services provided to such foreign diplomatic
mission or consular post in India for its official use, which is issued
with an entitlement certificate (with or without any conditions) on the
principle of reciprocity, by the Protocol Division of the Ministry of
External Affairs (MEA).
3.2 PROCEDURE:
STEP 1.- ISSUANCE OF CERTIFCATE BY MEA
- The Protocol Division of the MEA may issue a
certificate entitling a foreign diplomatic mission or consular post in
India, to receive tax free services for their official use based on the
principle of reciprocity. The certificate would remain valid, till it is
withdrawn, modified, annulled by MEA;
- The head of the mission/consular post after receiving
such certificate, would communicate to the MEA the name and the specimen
signature of the person (which may be either the head of the mission/
consular post or a person posted in such office and has been authorized
by the head of the mission) who would authenticate the copy of the
certificate and issue an undertaking in original for that mission or
consulate. Such undertaking will bear a running S. No. commencing from
the beginning of a financial year.
STEP 2.- AVAILMENT OF EXEMPTION
- The head of such foreign diplomatic mission or
consular post (or the person authorized by him) would issue, a copy of
such certificate duly authenticated by him along with a signed
undertaking, bearing running serial number and stating that the services
received are for official use of the said foreign diplomatic mission or
consular post, to the service provider /person liable to pay service tax
(but for this exemption). Based on such certificate and undertaking, tax
free service would be provided by the provider of taxable service.
- The invoice issued by the service provider would bear
the reference numbers of undertaking.
STEP 3.- VERFICATION OF THE CORRECTNESS OF AVAILMENT
OF EXEMPTION.
- The authorized person of foreign diplomatic mission
or consular post shall maintain an account of such undertakings issued
during a financial year so that in case of audit verification or
preventive checks, or in case where the bonafides of any document or
transaction is, prima-facie, in doubt, the accounts of service provider
(who would claim exemption) can be cross checked (through the Protocol
Division of MEA) with these records.
- The service provider shall retain the authenticated
copy of the certificate and the undertaking (in original) for future
verification.
- In case there is reason to believe that the scheme is
being misused or that the bonafides of any certificate is prima facie in
doubt and it is necessary to compare the signature of the authorized
person appearing on such certificate or the undertaking, the same can be
done by comparing with the specimen signature available with the
Protocol Division of MEA.
- If in future the Protocol Division withdraws such
facilities, it shall communicate to the foreign diplomatic mission or
consular post of such withdrawal. The Protocol Division would also
inform the Department of Revenue (Commissioner of Service Tax, Central
Board of Excise and Customs, North Block, New Delhi) about such
withdrawal.
- The benefit contained in this notification shall not
be available from the date of withdrawal of such certificate.
4 SCHEME FOR SERVICE TAX EXEMPTION ON ALL TAXABLE SERVICES
PROVIDED TO DIPLOMATIC MISSION AGENTS OR CAREER CONSULAR OFFICERS POSTED
IN A FOREIGN DIPLOMATIC MISSION OR CONSULAR POST IN INDIA FOR THEIR
PERSONAL USE.
4.1
CONDITIONS:
(a) The exemption would be available on the taxable
services provided to such diplomatic agent or career consular officer
working in a foreign diplomatic mission or consular post in India for his
personal use or for the use of their family members, who is issued with an
entitlement certificate (with or without any conditions) on the principle
of reciprocity, by the Protocol Division of the Ministry of External
Affairs (MEA).
(b) Such agent or officer should also hold a
photo-identification-card bearing a unique serial number, issued by the
Protocol Division of MEA or the Protocol Department of the State
concerned.
4.2 PROCEDURE:
STEP 1.- ISSUANCE OF CERTIFCATE BY MEA
- The Protocol Division of the MEA may issue a
certificate that the diplomatic agents or career consular officers
working in a foreign diplomatic mission or consular post in India, are
entitled to receive tax free services for their personal use or for the
use of their family members based on the principle of reciprocity.
The certificate would remain valid, till it is withdrawn,
modified, annulled by MEA;
- The head of the mission/consular post would
communicate to the MEA the name and the specimen signature of the person
(which may be either the head of the mission/ consular post or a person
posted in such office and has been authorized by the head of the
mission) who would authenticate the copy of the certificate and issue
undertakings in original for the agents or career consular officers
working in such diplomatic mission or counselor post in India.
STEP 2.- AVAILMENT OF EXEMPTION
- The head of such foreign diplomatic mission or
consular post (or the officer authorized by him) would issue, (i) a copy
of such certificate duly authenticated by him; (ii) a signed
undertaking, bearing a running serial number,
the unique serial number of the identification card issued by MEA
to the officer and stating that the services received are for personal
use of the said agent or career consular officer or for use by his
family members; and (iii) a photocopy of such identification card, duly
authenticated by him to the service provider /person liable to pay
service tax (but for this exemption). Based on such certificate,
undertaking and copy of identification card, tax free service would be
provided by the provider of taxable service.
- The invoice issued by the service provider would bear
the reference number of undertaking and the unique serial number of the
identification card.
STEP 3.- VERFICATION OF THE CORRECTNESS OF AVAILMENT
OF EXEMPTION.
- The authorized person of foreign diplomatic mission
or consular post shall maintain an account of such undertakings issued
during a financial year so that in case of audit verification or
preventive checks or in case where the bonafides of any document or
transaction is, prima-facie, in doubt, the accounts of service provider
(who would claim exemption) can be cross verified (through the Protocol
Division of MEA) with these records.
- The service provider shall retain the authenticated
copy of the certificate, the undertaking (in original) and authenticated
photocopy of identification card, for future verification.
- In case there is reason to believe that the scheme is
being misused or that the bonafides of any certificate is prima facie in
doubt and it is necessary to compare the signature of the authorized
person appearing on such certificate or the undertaking, the same can be
done by comparing with the specimen signature available with the
Protocol Division of MEA.
If in future the Protocol Division withdraws such facilities or
identification card, it shall communicate to the foreign diplomatic
mission or consular post, of such withdrawal. The Protocol Division
would also communicate to the Department of Revenue (Commissioner of
Service Tax, Central Board of Excise and Customs, North Block, New
Delhi) about such withdrawal.
- The benefit contained in this notification shall not
be available from the date of withdrawal of such certificate.
Yours faithfully,
(Gautam Bhattacharya)
Commissioner (Service Tax)
C.B.E.C, New Delhi
Copy for information, to,-
(1)
Director General (Service Tax), Mumbai
(2)
Chief Commissioners of Central Excise and Service Tax( (ALL)
(3)
Commissioners of Service Tax (ALL)
Go to
"Service Tax Update - 2007" Listings
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