Meaning: (as per rule 6A of service tax rules)

The provision of any service provided or agreed to be provided shall be treated as export of service when
a.  The provider of service is located in the taxable territory,
b.  The recipient of service is located outside India.
c.   The service is not which is specified in the section 66D of the act,
d.   The place of provision of the service is outside India.
e.   The payment for such service has been received by the provider of service in convertible foreign exchange and
f.   The provider of service and recipient of service are not merely establishments of a distinct person in accordance with section 66B of the act. Additionally one branch cannot provide service to another branch.

If place of provision of service is outside the taxable territory , service tax will not be payable even if the service is not export in terms of rule 6A or payment is not received by due date. Only implication will be rule 6 will apply and service provider has to reverse cenvat credit proportionally.

Remittance not in foreign exchange:
Even if remittance is not in foreign currency, it is still export of service. National engineering Industries ltd v. CCE (2008). Sometimes bank of exporter receives remittances on behalf of him; it is valid consideration for export purposes. Sterling Hoffman software consultants v. CCE (2013)

Option available for exporter:
1 Export without payment of excise duty/service tax and utilize cenvat credit for payment of excise duty/service tax on other goods manufactured and sold in India.
2. Claim refund of service tax paid on input services and excise duty paid on inputs as per rule 5 and notification no 27/2012.
3. Export without payment of service tax and claim rebate of service tax paid on input services and excise duty paid on inputs under notification no 39/2012.
4. For export of goods, claim rebate of service tax paid on input services, under notification 41/2012-st.
5. Outright exemption in respect of GTA services and services of foreign commission agent utilized for export of goods where service receiver is liable to pay service tax on reverse charge basis. Notification no 31/2012 service tax dated 20/6/2012 and 42/2012 st date29/6/2012.

Kindly note that export is not exempted service as per rule 2(e) of cenvat credit rules and proportional reversal for cenvat credit is not required.

Option 2: Refund of input service tax and duty under Cenvat credit rules:
As per rule 5,
The exporter can claim refund for duty paid on input and input services used while providing export service.
Procedure for claim of refund has been specified in notification no 27/2012-CE dated 18/6/2012.

Procedure:
Application should be submitted to AC/DC in form A with certificate signed by auditor in form A-1.Application should be submitted with copies of bank realization certificates in respect of services exported.

One application should be submitted every quarter.
Refund of input service credit will be to the extent of turnover of export.
Conditions:
1.  Rebate of excise duty /rebate of service tax have not been availed.
2.  Duty drawback has not been obtained.


Option 3: Rebate of service tax/duty paid on inputs/input services:
Under Notification no 39/2012,
Central government can grant rebate of service tax paid as or duty paid on input services or inputs, used in providing services which are exported.
Conditions :
1.  Services should be exported.
2.  Export to Nepal and Bhutan are not eligible for rebate.
3.  Payment should be received in free foreign exchange.
4.  Amount of rebate should be Rs. 1000 or more.
5.  Wrongly paid rebate should be recovered with interest.
6.   Cenvat credit should not have been availed.

Procedure for claiming rebate:
The exporter should file declaration before assistant/deputy commissioner about description of input and input service required for export of services and duty paid on those input and input services. The figure should be exact and not estimated. The exporter should obtain invoices. The claim shall be filed with jurisdictional AC/DC.FORM ASTR-2. The ac/dc can sanction rebate full or in part. If claim is not processed, brief reason should be informed to applicant.

Option 4:

Notification 41/2012 has been inserted to grant rebate of service tax paid on certain specified input services.
Meaning of specified services:
1. Taxable services used beyond place of removal for export of goods.
2. In case of goods which are not excisable goods, taxable services used for export of goods.


Methods of geranting rebate:
1.   Method as per ICES standard rate
2.   Refund on actual basis by making application and submitting proof of service tax actually paid on input services. For it, the difference between method 1 an 2 should be 20% or more.
Method to get refund through ICES system –para 2 of notification no 41/2012-st dated 29/6/2012.

Option 5:
Total exemption to GTA services and services of foreign commission agent
If exporter receives service of GTA service and services of foreign commission agent, he is not required to pay service tax on those services. The exporter should have Import Export Code Number and should been registered under service tax.
Notification no 31/2012-gta services exemption
Following GTA services are exempt:
1. Services provided to an exporter for transport of the said goods by gta in a goods carriage from any container freight station or inland container depot to the port or airport , from where the goods are exported
2.  Services provided to an exporter in relation to transport of the said goods by GTA in a goods carriage directly from their place of removal to ICD, CFS, a port or airport , as the case may be, from where the goods are exported.
Notification no 42/2012-exemption in respect of commission to foreign agent :
Limit of exemption: 10% of FOB value. If commission exceeds that limit, service tax will be payable on excess amount.
This exemption is not available in respect of export of canalized items, project export, export financed under credit lines of GOI or EXIM bank, export to joint venture partner or wholly owned subsidiary abroad.

Note:
Rebate:
Rebate of excise duty paid on inputs and service tax paid on input services used in providing services exported in terms of rule 6A of service tax rules to any country other than Nepal and Bhutan is available.
If rebate is granted but proceeds is not realized within time allowed by RBI , government can recover the rebate.
If service is already exempt from levy of service tax, it cannot be taxed by applying rule of export.