Export of Credit and Debit Card Services eligible for Cash Refund of Accumulated CENVAT Credit: CESTAT [Read Order]

The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has allowed the Cash Refund of Accumulated CENVAT Credit for export of 14 input services including export of credit and debit card services.

The appellants, Northern Operating were registered with the Service Tax Department under various taxable service categories, including Business Auxiliary Service, Business Support Service, and Manpower Recruitment.

They claimed CENVAT credit on input services used for providing export services and sought cash refunds for the accumulated credit under Rule 5 of the CENVAT Credit Rules, 2004. While a major portion of their claims was allowed, the authorities below denied credit on specific services like Air Travel, Banking, and Financial Services, among others, deeming them ineligible for refunds.

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Challenging this, the appellants appealed to the Commissioner (Appeals), who partially upheld the lower authorities’ decision. Before CESTAT, the appellants argued that the 14 input services in question had been previously deemed admissible under various tribunal rulings.

The bench of D M Misra (Judicial member) and R Bhagya Devi (Technical member) examined whether the CENVAT credit on these input services was eligible for cash refunds linked to the export of services.

The 14 input services claimed by appellants were: Real Estate Agent service, Management/Business Consultant, Air Travel Service, Credit cards, debit cards services, Event Management service, Outdoor Catering Service, Banking or Financial Service, Club or Association membership fees, Design Service, House Brokering Service, Construction, Supply of Tangible Goods, Health Club & Fitness Centre and Tour Operator Service.

The tribunal reviewed past judgments supporting the eligibility of these services, CESTAT concluded that the appellants were entitled to cash refunds for the accumulated CENVAT credit on the exports made during the relevant period.

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For Credit cards, debit cards services, the tribunal noted the decision in RMZ Infotech Pvt. Ltd. v. Commissioner of Central Tax, Bengaluru East and M/s. Fidelity Business Services India Pvt Ltd v. Commissioner Of Commissioner of Central Tax. With regards to the Real Estate Agent service, the tribunal referenced CESTAT’s decision in Golflinks Software Park Pvt Ltd V. C.C.E & C.S.T.. Along with rulings referenced, the tribunal also clarified the nexus with the output service.

Similarly, the tribunal referenced many past orders of the tribunal for allowing the cash refund to the 14 input services claimed by the appellant.

As a result, the tribunal modified the lower authorities' orders, allowing credit on the disputed input services and granting refunds accordingly.

To Read the full text of the Order CLICK HERE

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