CA Final Student
137 Points
Posted on 13 February 2014
A brief overview:
For the purpose of Finance Act, 1994, an SEZ unit is included in the taxable territory of India, unlike the case in Central Excise Act, 1944, where sales made by DTA to SEZ is termed as exports. Accordingly, services rendered to SEZ is not an export of service and hence, taxable under the service tax law.
However, by provisions of Notification 12/2013-ST, exemption is granted to SEZ, subject to certain conditions, on the following basis:
i.If services so availed are exclusively used for authorized operations of SEZ, then up-front exemption form payment of service tax is allowed. In other words, SEZ can receive services without the payment of service tax to service provider.
ii.If services are commonly used for both the authorized as well as non-authorized operations, then exemption is granted by way of refund. Quantum of refund allowed shall be determined by the procedure laid down in Rule 7 of CENVAT Credit Rules, 2004.
Such claims for refund can be filed every quarter, limited to one claim per quarter