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Export condition fulfilled even if payment is received in Indian Rupees

Service Tax - By: - Bimal jain - Dated:- 30-5-2015 Last Replied Date:- 30-5-2015 - Dear Professional Colleague, We are sharing with you an important judgment of the Hon ble Mumbai Tribunal, in the case of Sun-Area Real Estate Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai-I [2015 (5) TMI 885 - CESTAT MUMBAI] on following issue: Issue: Whether the conditions of export of services under the erstwhile Export of Service Rules, 2005 is satisfied when the payment was received in Indian Rupees throu .....

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trade or payments agreements.Accordingly, the Appellant filed refund claim amounting to ₹ 10,89,279/- in respect of Service tax paid on export of services under the erstwhile Export of Service Rules, 2005 ( the Export of Service Rules ). The Department denied refund to the Appellant on the ground that since in the present case, the payment was received in Indian Rupees,therefore, the condition of Rule 3(ii) of the Export of Service Rules is not complied with. Thereafter, the refund claim w .....

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n Indian Rupees, but through authorised dealer, the payment/remittance should be considered as foreign exchange. Held: The Hon ble CESTAT, Mumbai held as under: As per Clause 3A.6(i) of the Exchange Control Manual, it is clear that FIRC is issued only in respect of foreign exchange; In the present case, FIRCs were issued and there is a specific certification that the payment has not been received in non-convertible rupees, which establishes that the payment received and mentioned in the FIRCs .....

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receipt of payment in convertible foreign exchange; In the case of J.B. Boda and Company Private Ltd.Vs. Central Board of Direct Taxes [1996 (10) TMI 70 - SUPREME Court] the payment towards insurance brokerage retained by the Indian agent from the total payment of premium to be paid to the foreign insurance company in foreign exchange, was held to be retained in foreign exchange; Accordingly, it was held that even though the Appellant received the payment in Indian Rupees but the same is deemed .....

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fulfilled for a service to be considered as export of service are mentioned here under: the provider of service is located in the taxable territory; the recipient of service is located outside India; the service is not a service specified in Section 66D of the Finance Act, 1994; the place of provision of the service is outside India (determined as per the Place of Provisions of Services Rules, 2012); the payment for such service has been received by the provider of service in convertible f .....

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