DESPITE the continuous increase in the list of services for which exporters would be given refunds, many exporters are not enthused. The exclusion of exporters claiming duty drawback (a scheme reimbursing exporters a part of the duties on inputs) from getting refunds of service tax has disappointed a large section of exporters. Moreover, the mandatory requirement of registration of exporters with the excise department for claiming refunds and other procedural snarls has given rise to complaints, especially from merchant exporters. The restrictive clauses in the refund provision of service tax on commission paid to foreign agents has also done its bit in taking the fizz out of the incentive. Speaking to ET, commerce department officials pointed out that the government had made provisions of increasing the drawback amount claimed by exporters by 0.4% of the FOB value of exports, but it is not enough. “In a number of cases, exporters end up paying much more as taxes on services than the provision made in the drawback. That is why, exporters are feeling short-changed,” an official said. According to Delhi Exporters Association president SP Agarwal, a number of services like courier are not related to the export value of goods. “There is no justification for clubbing service tax refund with duty drawback. We want the government to give all exporters separate refunds for service tax,” he said. Till date, the finance ministry has passed notification for refunding exporters taxes paid on 16 services. These include port services, transport of goods by road and railways, general insurance, technical testing & analysis, storage & warehousing, business exhibition services and specialised cleaning services. Taxes on commission paid to foreign agents and banking charges are the latest addition on the exemption list. However, exemption of tax on commission paid to foreign agents comes with a rider. The fineprint says the refund would be based on either the actual amount of service tax paid or 2% of the service tax on FOB, whichever is lesser. Since exporters of products such as textiles and pharmaceuticals pay about 10-15% commission to foreign agents, a 12.5% service tax charged on the commission works out to be around 1.8% of the value of exports. On the other hand, 2% of the service tax on FOB, amounts to only 0.25% of the value of exports.