Service tax liability 6%
This query is : Resolved
22 April 2014
Dear Friends
can u guide me whether there are any provision regarding payment of service tax liability where service has been supplied to the sez.Is there any kind of reverse charge mechanism (Rate @ 6%)regarding service provided to the sez.plz suggest me.we r provide courier service
pls provide me relevant law
can u guide me whether there are any provision regarding payment of service tax liability where service has been supplied to the sez.Is there any kind of reverse charge mechanism (Rate @ 6%)regarding service provided to the sez.plz suggest me.we r provide courier service
pls provide me relevant law
14 July 2014
dear professional frnds
kindly reply me above my query
thanx in advance
kindly reply me above my query
thanx in advance
24 July 2025
Hey! About your question on **service tax liability for services provided to a SEZ (Special Economic Zone)** and the **reverse charge mechanism (RCM) at 6%** for courier services, here’s a detailed explanation:
---
### 1. **Service Tax on Services Provided to SEZ Units**
* SEZ units are considered **“special”** for tax purposes.
* Generally, **services provided to SEZ units are treated as “export of service”** if conditions of export are met (place of provision outside India, payment in convertible foreign exchange, etc.).
* **Export of service is zero-rated** under service tax law (i.e., no service tax payable).
---
### 2. **Reverse Charge Mechanism (RCM) for Services Provided to SEZ**
* However, certain services provided **to SEZ developers or SEZ units** are taxable under **reverse charge**.
* Notification No. 33/2012-ST dated 20 June 2012, and its amendments, cover RCM for certain services when provided to SEZ units or developers.
---
### 3. **Courier Services and RCM @ 6%**
* Courier services provided to SEZ units or developers are **covered under RCM** under some notifications.
* **Rate applicable is 6%** on courier services under RCM, which is half the normal rate (as earlier service tax rate was 12%).
* You, as the service provider, **do not charge service tax on your invoice** to SEZ, but the SEZ unit/developer (service recipient) is liable to pay service tax under RCM at 6%.
---
### 4. **Relevant Law**
* **Notification No. 33/2012-Service Tax (RCM)** and subsequent amendments.
* **Section 68(2) of Finance Act, 1994** (RCM provision).
* Specific exemption and RCM provisions related to SEZ are given in SEZ Rules and related notifications.
---
### 5. **Summary**
| Situation | Who Pays Service Tax? | Rate | Remarks |
| ----------------------------------------------------------------- | ----------------------------------- | ---- | ------------------------------------------ |
| Courier services to SEZ units | SEZ unit/developer (reverse charge) | 6% | Service provider bills without service tax |
| Export of service to SEZ (other than notified services under RCM) | Nil (Zero-rated) | 0% | No service tax payable |
---
If you want, I can share the exact notification texts and help you draft your invoices or compliance documents accordingly. Would that help?
---
### 1. **Service Tax on Services Provided to SEZ Units**
* SEZ units are considered **“special”** for tax purposes.
* Generally, **services provided to SEZ units are treated as “export of service”** if conditions of export are met (place of provision outside India, payment in convertible foreign exchange, etc.).
* **Export of service is zero-rated** under service tax law (i.e., no service tax payable).
---
### 2. **Reverse Charge Mechanism (RCM) for Services Provided to SEZ**
* However, certain services provided **to SEZ developers or SEZ units** are taxable under **reverse charge**.
* Notification No. 33/2012-ST dated 20 June 2012, and its amendments, cover RCM for certain services when provided to SEZ units or developers.
---
### 3. **Courier Services and RCM @ 6%**
* Courier services provided to SEZ units or developers are **covered under RCM** under some notifications.
* **Rate applicable is 6%** on courier services under RCM, which is half the normal rate (as earlier service tax rate was 12%).
* You, as the service provider, **do not charge service tax on your invoice** to SEZ, but the SEZ unit/developer (service recipient) is liable to pay service tax under RCM at 6%.
---
### 4. **Relevant Law**
* **Notification No. 33/2012-Service Tax (RCM)** and subsequent amendments.
* **Section 68(2) of Finance Act, 1994** (RCM provision).
* Specific exemption and RCM provisions related to SEZ are given in SEZ Rules and related notifications.
---
### 5. **Summary**
| Situation | Who Pays Service Tax? | Rate | Remarks |
| ----------------------------------------------------------------- | ----------------------------------- | ---- | ------------------------------------------ |
| Courier services to SEZ units | SEZ unit/developer (reverse charge) | 6% | Service provider bills without service tax |
| Export of service to SEZ (other than notified services under RCM) | Nil (Zero-rated) | 0% | No service tax payable |
---
If you want, I can share the exact notification texts and help you draft your invoices or compliance documents accordingly. Would that help?
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