Appellant in Special Economic Zone not liable for service tax under Notification NO.9/2009-ST The Tribunal held that the appellant, providing services to a unit in a special economic zone under works contract services, was not liable to pay service ...
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Appellant in Special Economic Zone not liable for service tax under Notification NO.9/2009-ST
The Tribunal held that the appellant, providing services to a unit in a special economic zone under works contract services, was not liable to pay service tax under Notification NO.9/2009-ST. Relying on precedents such as Nokia India Pvt.Ltd. and Insta Pharma Limited, the Tribunal concluded that the provisions of the notification did not impose any obligation on the recipient of services within the special economic zone. Therefore, the demand for service tax was set aside, and the appeal was allowed in favor of the appellant.
Issues: - Liability to pay service tax on services provided to a unit in a special economic zone under works contract services.
Analysis:
The appellant appealed against an order demanding service tax on services provided by them to a unit in a special economic zone categorized as works contract services. The Revenue contended that the appellant was liable to pay service tax under Notification NO.9/2009-ST. The appellant argued that they were not liable to pay service tax based on precedents, including the case of Nokia India Pvt.Ltd. and Insta Pharma Limited. The Revenue, on the other hand, maintained that the appellant was indeed liable to pay service tax as per the notification mentioned. The Tribunal considered the submissions and referred to previous judgments to analyze the issue. They noted that the appellant's liability to pay service tax had been examined in the case of Insta Pharma Limited, where it was observed that the provisions of the notification did not impose any disability on the recipient of services in respect of taxable services consumed within the special economic zone. Similarly, in the case of Nokia India Pvt.Ltd., it was held that the provisions of the Act could not be interpreted to eclipse the procedural prescriptions of the notification. Therefore, the Tribunal concluded that the appellant, providing services to the special economic zone unit, was not required to pay service tax under section 26 of the Special Economic Zone Act, 2005. Consequently, the demand for service tax against the appellant was set aside, and the appeal was allowed with any consequential relief.
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