Reverse Charge (GTA) and SEZ Unit

[Ashok Chopra]

Dear Forum,

I am SEZ unit receiving and sending goods through transporter, who is not charging any service tax as the transporter is not registered with service tax department.

My queries:-

1. Can SEZ unit be called as located in the taxable territory?

2. If yes, should i go for the exemption benefit and fulfill the formalities of Form-A1, Form-A2 and Form-A3?

3. If no, what should i do?

Thanks and regard

[Rajagopalan Ranganathan]

Sir,

             Section 26 (e) the Special Economic Zone Act, 2005 stipulate that every  Developer and the entrepreneur shall be entitled to  exemption from service tax under Chapter-V of the Finance Act, 1994 on taxable services provided to a Developer or Unit to carry on the authorized operations in a Special Economic Zone.

            Therefore in my opinion you are not liable to pay any service tax.

[Raja krishnan]

Dear Sir,

Please go through the Notification No:12/2013 dated 01.07.2013 as follow this Notification you (SEZ) are applicable to pay service tax as well as refund the same. In this decision up to my end. 

AI Summary

Reverse charge liability for GTA services in SEZs: exemption claim versus notification-based payment and refund obligations.
Whether a SEZ unit must discharge reverse charge for GTA services from an unregistered transporter or can rely on the Special Economic Zone entitlement to exemption for taxable services; advisors offered conflicting views-one asserting exemption for services to Developers/Units and the other pointing to a notification that subjects SEZ supplies to service tax with refund procedures-raising the related question of whether exemption formalities (Form-A1, Form-A2, Form-A3) must be completed if the unit is treated as located in the taxable territory.