TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal Upholds SEZ Tax Exemption, Emphasizes Primacy of SEZ Act Over Finance Act in Dismissing Tax Liability Claims.</h1> <h3>eClerx Services Limited Versus Commissioner of CGST & Central Excise, Navi Mumbai</h3> eClerx Services Limited Versus Commissioner of CGST & Central Excise, Navi Mumbai - 2023 (72) G. S. T. L. 99 (Tri. - Mumbai), [2023] 116 G S.T.R. 440 ... Issues involved:1. Taxability of services rendered to units in special economic zones (SEZ)2. Allegation of rendering taxable services without discharging tax liability3. Charging proportionate contribution of expenditure from subsidiary enterprises for business auxiliary service4. Interpretation of the exemptions under the Special Economic Zones Act, 20055. Finding on the location of services rendered and consumedAnalysis:Issue 1: Taxability of services to SEZ unitsThe appellant contested the order to recover tax, interest, and penalty under the Finance Act, 1994 for services rendered to an SEZ unit. The appellant argued that the services were not taxable due to privileges granted under the SEZ Act, 2005. The appellant cited precedents and rules to support their claim that compliance with SEZ rules exempted them from tax liability. The tribunal agreed, emphasizing the overriding nature of the exemption under Section 26 of the SEZ Act, 2005. The tribunal found procedural lapses but upheld the exemption, setting aside the demand.Issue 2: Allegation of non-payment of tax liabilityThe appellant was accused of not discharging tax liabilities for services rendered during specific periods. The tribunal examined the notifications and conditions for exemptions. Despite procedural shortcomings in documentation, the tribunal noted the existence of eligibility at some point. The tribunal emphasized that procedural lapses did not negate the exemption under the SEZ Act, 2005. Consequently, the demand related to services rendered to a specific entity was set aside.Issue 3: Charging expenditure from subsidiary enterprisesAn allegation was made against the appellant for charging expenditure from subsidiary enterprises for business auxiliary services within India without discharging the tax liability. The tribunal considered this allegation and found that the demand for services allegedly rendered within India did not hold, emphasizing the different definitions of 'export' under the SEZ Act, 2005 compared to the Finance Act, 1994.Issue 4: Interpretation of exemptions under the SEZ Act, 2005The tribunal analyzed the interpretation of exemptions under Section 26 of the SEZ Act, 2005, emphasizing the primacy of SEZ rules over other laws. Citing relevant judgments and rules, the tribunal concluded that the exemptions provided under the SEZ Act, 2005 prevailed over procedural lapses, ultimately setting aside the impugned order and allowing the appeal.Issue 5: Location of services rendered and consumedThe tribunal addressed the finding that services were allegedly rendered and consumed in India. By comparing definitions under the SEZ Act, 2005 and the Finance Act, 1994, the tribunal concluded that the demand for services allegedly rendered within India was not sustainable, further supporting the appellant's position.In conclusion, the tribunal set aside the impugned order, allowing the appeal based on the overriding nature of exemptions under the SEZ Act, 2005, and the procedural lapses not affecting the eligibility for exemption from tax liability.
TaxTMI 