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Service Tax on SEZ Unit

Pradeep Jain (service) (143 Points)

11 June 2009

Hi,

Please suggest me whether we should charge service tax for telecommunication services to SEZ units as one of our client is saying that for SEZ unit no service tax will be charged on invoices.

Thanks

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11 Replies

Tahseen Tabassum (CA-FINAL) (644 Points)
Replied 11 June 2009

Yes for SEZ service tax is exempt

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Pradeep Jain (service) (143 Points)
Replied 12 June 2009

Thanks but my question is wheter we should add service tax on invoice or invoice without service tax will be generated in case of SEZ's

Tahseen Tabassum (CA-FINAL) (644 Points)
Replied 12 June 2009

Without Service Tax

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 13 June 2009

The SEZ are required to get the list of services consumed within the SEZ approved. If you have the approval letter, then you need not charge the ST. Please nesure that you keep the dept. informed of the same.

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 18 June 2009

In my opinion service tax needs to be charged on services provided to the SEZ. SEZ can claim this amount by way of refund. According to notification no. Notification No.9/2009-Service Tax

"2. The exemption contained in this notification shall be subject to the following conditions, namely:-

(a) the person liable to pay service tax under sub-section (1) or sub-section (2) of section 68 of the said Finance Act shall pay service tax as applicable on the specified services provided to the developer or units of Special Economic Zone and used in relation to the authorised operations in the Special Economic Zone, and such person shall not be eligible to claim exemption for the specified services:

Provided that where the developer or units of Special Economic Zone and the person liable to pay service tax under sub-section (2) of section 68 for the said services are the same person, then in such cases exemption for the specified services shall be claimed by that person;

(b) the developer or units of Special Economic Zone shall claim the exemption by filing a claim for refund of service tax paid on specified services"

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 18 June 2009

Not 15/2009 20.5.2009 substiutes Not. 9/2009 and states that what services are consumed within the SEZ wholly the same are exempt. In the case of telecommunication it is presumably consumed fully within the SEZ and therefore wouldbe wholly exempt. However all services provided to SEZ are not exempt it mayeb noted.

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 18 June 2009

Hi Pradeep,

If you are able to confirm that tyhe services rendered by you are wholly consumed within the SEZ by the developer or unit in SEZ, do not charge ST in the invoice. In this regard, you can obtain a undertaking from the developer or unit. Else, charge ST in the invoice

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 18 June 2009

I am not able to differentiate between services which are used in relation to the authorised operations in the Special Economic Zone and services consumed wholly within the Special Economic Zone. Please explain.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 20 June 2009

There appears to be a grey area presently. Ask the customer to get a list of services approved by the revenue authority as being used for authorised operations. This would confirm the same.

Considering the type of service I think it should be presumably used for authorised operations.

Jignesh Parekh (Accounts Executive) (21 Points)
Replied 14 March 2011

Service Tax - Notification No. 15/2009 Dated Wednesday, May 20, 2009 - Amends Notification No. 9/2009-Service Tax, dated the 3rd March, 2009 - Exemption to Services Provided in relation to authorized operations in a Special Economic Zone (SEZ) and received by a developer or units of a Sez

With reference to above notification, Is Service Tax Chargable to SEZ unit in Invoice ? ?, what is the exect procedure ? Please Suggest me...