Procedure of service tax refund/exemption to SEZ-reg.

CA Bimal Jain

Clarification on Procedure of Service tax refund/exemption to SEZ

As per the Existing provisions, Special Economic Zone (SEZ) unit or developer has to approach two authorities i.e. the SEZ Authority and the Jurisdictional Service Tax Authority for upfront exemption under Notification No. 12/2013-ST dated July 1, 2013 (the Notification) as amended.

In order to remove the difficulties, the Ministry of Finance, Department of Revenue vide Instruction F.No.B1/6/2013-TRU dated November 25, 2014 has clarified that SEZ units and developers may route their application for issuance of authorization by the Department through the specified officer of SEZ instead of submitting directly to the Department. Similarly SEZ units and developers may also route quarterly statement in Form A-3 through the specified officer in the SEZ. It has been further clarified that the Notification does not put any restriction in this regard.

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F. No. B1/6/2013-TRU

Dated- 25th November, 2014

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

North Block, New Delhi

Subject: Procedure of service tax refund/exemption to SEZ-reg.

Certain representations have been received through Ministry of Commerce raising the issue that SEZ unit or developer has to approach two authorities (the SEZ authority and with the Jurisdictional Service Tax authority) for upfront exemption under notification No. 12/2013 dated 01.07.2013 as amended.

2. The issue has been examined. The procedure prescribed under the notification No. 12/2013 dated 01.07.2013 as amended is for proper accounting and monitoring of benefit availed by SEZ Unit and developer under the exemption. Further compliance verification at the service provider’s end (in domestic tariff area) would only be feasible if an institutional mechanism for accounting and verification procedure is in place. However, SEZ units and developer may, if they so desire, route their application for issuance of authorization by department through the specified officer of SEZ instead of submitting directly to the department. Similarly SEZ units and developer, may also route quarterly statement in Form A-3 through the specified officer in the SEZ. Notification No. 12/2013 dated 01.07.2013 as amended does not put any restriction in this regard.

3 .  Accordingly the field formations should not object if such requests/intimations are routed through the specified officer in the SEZ.

Dr. Abhishek Chandra Gupta

(Technical Officer, TRU)