10 April 2010
The provision has been drastically changed w.e.f. 20-5-2009. Services provided to Special Economic Zone (SEZ) unit or SEZ developer will be exempt if the services are wholly consumed within SEZ. If the services are consumed wholly or partly outside SEZ, the services will be taxable at the hands of service provider [During the period 3-3-2009 to 20-5-2009, all services provided to SEZ unit or SEZ developer were taxable at the hands of service provider and the SEZ unit/developer was required to claim refund]. Now, w.e.f. 20-5-2009, the service provider to SEZ unit or SEZ developer will have to charge and pay service tax as per normal procedure only when service is wholly or partly consumed outside SEZ. These services will be exempt from service tax at hands of SEZ or SEZ developer by way of refund. The SEZ or SEZ Developer will have to file refund claim as per procedure prescribed in Notification No. 9/2009-ST dated 3-3-2009. If the service is wholly consumed within SEZ, the service provider is not required to charge service tax and hence no question of any refund.
Service provided by SEZ - SEZ is exempt from service tax.
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