Refund of service tax in exempt zones

Save Share

This query is : Open

siddharth (Querist)

13 February 2012 A unit has been set up in Himachal Pradesh where specifically by notification excise duty is exempt. But, some service providers levy service tax. Is service tax automatically exempt? or Should we file a refund claim for service tax?

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)

13 February 2012 Area based Exemption in excise duty will not result into automatic exemption of service tax unless there is specific notification to that effect. Only Service provided in J & K are out purview of service tax.

Further Rule 5A of Cenvat Credit Rules, 2004 only deals with refund of Cenvat credit of duty paid on inputs used in manufacture in specific areas and does not cover refund of service tax paid on input service.

There, you will not able to file refund claim.

PAWAN KUMAR

PAWAN KUMAR (Expert)

13 February 2012 Exemption for excise duty is available under area based exemption for the units located Himachal Pradesh and Uttarakhand not for the service tax. You will set off the cenvat credit of service tax if accumulating on input services towards your output service tax liability.

CHIDHAMBARA BALAJI

CHIDHAMBARA BALAJI (Expert)

16 July 2013 If the manufacturing company is paying rent for its premises and accumulating its cenvat credit,and also there won't be arising any excise/service tax liability being the unit is exempted,is there any possibility to adjust this in the service tax payable for its branch unit located in Tamilnadu?

CHIDHAMBARA BALAJI

CHIDHAMBARA BALAJI (Expert)