Ashok Thakur

Ashok ThakurEffective from 01.07.2013 in terms of service tax notification no 12/2013-ST, All SEZ Unit/ Developers/ Co-developers have to provide Form A2 authorisation from service tax authority for availing the upfront service tax exemption otherwise first pay service tax and claim refund of it from the Govt.

Upfront exemption has to be provided only on the basis of the Form A2 authorisation date which is issued on the basis of Form A1 Declaration duly verified by the SEZ Authority. If Form A2 has not been provided SEZ Unit/ Developers/ Co-developers is not eligible for upfront exemption.

Later Govt. also made amendment in the above notification effective from 11.07.2014 thereby only giving some relax time for applying Form A2 authorisation within 15 days of receipt if Form A1 Declaration.

It is pertinent to mention that recently Govt. has made harassed provision for charging interest @ 30% if there is a delay of service tax deposit more than one year. There has been the case of delay more than one year in depositing the service tax due to non-payment of service tax by the clients on account of Form A2 authorisation. Under the situation further delay will put additional burden of higher interest for which there is no provision for the waiver of interest.

Appended below Check List for passing on upfront service tax exemption to SEZ Unit
For the Period 01.03.2011 to 30.06.2012 (As per Service Tax Notification No. 17/2011-ST)
Sr. No
Documents Required 
Condition to be fulfilled/not fulfilled 
Exemption Effective From 
Whether Service Tax /Interest to  be Charged 
Condition
Form A1/ Letters /Form A2 provided (Yes Or No)
Service Tax
Interest
1(a)
Form A1
Form A1 to be provided up to 30.06.2012 by SEZ Unit.
Yes
01.03.2011
No
No
1(b)
Letter
In absence of Form A1- SEZ Unit has to provide letter from their respective SEZ Office confirming that Form A1 is not applicable for this period.
Yes
01.03.2011
No
No
1( c)
Form A1
Form A1 to be provided up to 30.06.2012 by SEZ Unit
No
No Exemption
Yes, w.e.f 01.03.2011
Yes, w.e.f 01.04.2011
1(d)
Letter
In absence of Form A1 – SEZ Unit has to provide letter from their respective SEZ Office confirming that Form A1 is not applicable for this period.
No
No Exemption
Yes, w.e.f 01.03.2011
Yes, w.e.f 01.04.2011
For the Period 01.07.2012 to 30.06.2013 (As per Service Tax Notification No. 40/2012-ST)
2(a)
Form A1
Form A1 to be provided up to 30.06.2013 by SEZ Unit.
Yes
01.07.2012
No
No
2(b)
Form A1
Form A1 to be provided up to 30.06.2013 by SEZ Unit.
No
No Exemption
Yes, w.e.f 01.07.2012
Yes, w.e.f 06.08.2012
For the Period 01.07.2013 to 10.07.2014  (As per Service Tax Notification No. 12/2013-ST)
3(a)
Form A2
Form A2 is to be provided having the validity effective from 01.07.2013 categorically mentioned in the Form and should be provided upto 10.07.2014 by SEZ Unit.
Yes
01.07.2013
No
No
3(b)
Form A2
Form A2 is not containig  validity date  as 01.07.2013 but provided upto 10.07.2014 by SEZ Unit.
Yes – without effective date
From the date of submission of Form A2 to us
Yes – For the period 01.07.2013 to date of submission of Form A2
Yes – For the period 06.08.2013 to date of submission of Form A2
From 11.07.2014 onwards (As per Service Tax Notification No. 12/2013-ST as amended 07/2014-ST)
4(a)
1) Form A2 alongwith Form A1 or
Form A2 has been applied & obtained within 15 days of Form A1 date by the SEZ Unit a
Yes
From the date of Form A1
No
No
2) Application of Form A2 alongwith Form A1, Form A2
Application of Form A2 alongwith Form A1 is to be provided immediately to us and subsequently Form A2 is also to be provided to us within 3 month of the starting of service/billing.
Yes
From the date of Form A1
No
No
4(b)
1) Form A2 alongwith Form A1 or
Form A2 has been applied & obtained within 15 days of Form A1 date by the SEZ Unit
No
No Exemption
Yes
Yes
2) Application of Form A2 alongwith Form A1, Form A2
Application of Form A2 alongwith Form A1 is to be provided immediately to us and subsequently Form A2 is also to be provided to us within 3 month of the starting of service/billing.
No
No Exemption
Yes
Yes

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2 Comments

  1. shubham jain says:

    Hello,

    One of our client provided Services from july13 to march14 to unit located in SEZ without obtaining Declaration i.e. FORM A2, as he was unaware of the amendment and further his client failed to provide so after no of followups. Now he has no commercial relationship with that client.

    Recently he has been issued a notice demanding service tax for services provided to SEZ unit.

    kindly guide on the above issue.

    Thanks.

  2. Shubham says:

    Hello,

    One of our client provided Services from july13 to march14 to unit located in SEZ without obtaining Declaration i.e. FORM A2, as he was unaware of the amendment and further his client failed to provide so after no of followups. Now he has no commercial relationship with that client.
    Recently he has been issued a notice demanding service tax for services provided to SEZ unit.

    kindly guide on the above issue.

    Thanks.

  3. TW Unnikrishnan says:

    One of our customers, a contractor of an SEZ, wants us to exempt it from service tax based on a Form A2 issued in favour of the developer. Nowhere in the Form A2, the contractor’s name appears. The contractor has submitted a “To whomsoever it may concern” letter issued by the Specified Officer of the SEZ stating that it is a contractor to the SEZ developer, and accordingly it is “entitled” for all the benefits of the SEZ unit, including ab initio tax exemption. I would appreciate if someone can advise if the Form A2 authorization by the Commissioner in the name of the developer can also be extended to a contractor, or does the contractor have to obtain and submit a separate Form A2 for us to exempt them from service tax in our billing.

  4. rajendra Jogalekar says:

    To file Form A-1 at Sez for srvice Tax Exemption for the service providing vendor’s as well as DTA services as per the LOA pls. comment on the doc. required for

  5. NITESH says:

    IN THE CASE OF ONE UNIT SEZ AND ANOTHER IS DOMESTIC TARIFF AREA,UPFRONT EXEMPTION CAN BE AVAIL ON THE BASIS OF TURNOVER RATIO, MY Q.IS WHAT TIME PERIOD TURNOVER RATIO IS CONSDER

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