Service tax liability 6%

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Mukesh Katara (Querist)
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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

Mukesh Katara

Mukesh Katara (Querist)
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14 July 2014 dear professional frnds

kindly reply me above my query

thanx in advance

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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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:

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### 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).

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### 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.

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### 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%.

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### 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.

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### 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 |

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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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