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payment of service tax

deepti (trainee) (65 Points)

03 December 2008

dear all

please tell me if an information technology service provider is exempt from service tax for services provided to SEZ's STPI and 100% EOU?

please tell me if there is any notification or case law relating to it.

thanks all

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3 Replies

Dhaval Vohera (48 Points)
Replied 03 December 2008

Yes.

Services provided to units in approved SEZ are exempt from the whole of the service tax.

The Central Govt. has exempted from service tax the taxable service of any descripttion provided to a developer of SEZ or an uint of SEZ from the whole of the Service tax leviable thereon. (vide Notification No. 4/2004 dated 31.3.2004).

Hope you got the solution.

Regards,

DHAVAL VOHERA. (CA, CS)

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PARMOD (CON) (29 Points)
Replied 04 December 2008

Notification of exempt of service tax saz give as below

31^st March, 2004

Notification No. 4 / 2004 - Service Tax

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 ( 32 of 1994) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs ( Department of Revenue), No. 17/2002-ServiceTax, dated the 21^st November, 2002, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section ( i ) dated the 21^st November, 2002, vide, G.S.R.777(E), dated the 21^st November 2002, except as respects things done or omitted to be done before such supersession , the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service of any descripttion as defined in clause (90) of sub-section (1) of section 65 of the said Act provided to a developer of Special Economic Zone or a unit (including a unit under construction) of Special Economic Zone by any service provider for consumption of the services within such Special Economic Zone, from the whole of service tax leviable thereon under section 66 of the said Act, subject to the following conditions, namely:-

(i)	the developer has been approved by the Board of Approvals to develop, operate and maintain the Special Economic Zone;
(ii)	the unit of the Special Economic Zone has been approved by the Development Commissioner or Board of Approvals, as the case may be, to establish the unit in the Special Economic Zone;
(iii)	the developer or unit of a Special Economic Zone shall maintain proper account of receipt and utilisation of the said taxable services.

Explanation .- For the purposes of this notification,-

(1)	“ Board of Approvals ” means the combined Board of Approvals for export oriented unit and Special Economic Zone units, as notified in the Official Gazette, from time to time by the Government of India in the Ministry of Commerce and Industry;
(2)	“ developer ” means a person engaged in development or operation or maintenance of Special Economic Zone, and also includes any person authorised for such purpose by any such developer;
(3)	“ Special Economic Zone” means a zone specified as Special Economic Zone by the Central Government in the notification issued under clause (iii) of Explanation 2 to the proviso to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944).

V. Kezo
Under Secretary to the Government of India

F. No. 305/55/2003-FTT

Ritesh Jain (CA, CS in Job) (675 Points)
Replied 04 December 2008

Originally posted by :deepti
"	Can any body tell me...... that if Liquidity damages are deducted by the client at the time of payment ........than on what amount service tax is to be paid by the receiver of amount i.e service provider....i)on full invoice value or ii) INvoice value less liquidty damages deducted.??????????????	"