The government today vide circular no. Circular No.142/11/2011 – ST  dated 18th May 2011, said that SEZ unit and developers would require the sanction of Unit Approval Committee for availing benefits of service tax refund. Besides, developers and units would also have to furnish original invoices for claiming benefits, the Department of Revenue said in a circular.

SEZ units and developers are exempted from service tax. However, in case of services taken from outside the zone they are levied the tax which can be later refunded.

“Unit Approval Committee (UAC) of the SEZ determines goods and services required for the authorised operations of a unit/developer under the SEZ law. Hence, approval of the UAC is necessary for availing the notification benefit, on the taxable services,” it said.

The UAC is one of the three tiers of administrative setup governing SEZs. The UAC at the zonal level dealing with approval of units in the SEZs and other related issues.

The circular further said: “…Original invoices are needed for claiming refund. After receiving the refund, originals can be taken back on submission of copies certified by chartered accountant.”

It further added that consolidated refund can be claimed in case a single entity has multiple SEZ units with a centralised service tax registration.

However, for such a benefit separate accounts have to be maintained for receipt and use of services for the authorised operations in SEZ unit.

Clarification on Service Tax Refund to SEZ – Circular No. 142/11/2011-ST

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