Service Tax on Reverse Charge and SEZ Unit

[Ashok Chopra]

Respected Forum,

I am a SEZ Unit availed services of Manpower Recruitment. Service Provider is not having Service Tax Registration, hence not charged any service tax on the amount of Bill. No formality of A-1 and A-2 has been done. This service comes under Reverse Charge Mechanism.

My query:-

1. Whether I am liable to pay Service Tax on the amount of Bill?

2. If yes, should i pay with interest?

3. Being SEZ unit, can i get refund of this amount? if yes, please let me know the procedure.

AI Summary

Reverse charge on manpower supply: recipient liable for service tax and should pay with interest; refund depends on approval list.
SEZ recipients of manpower supply services where the supplier is unregistered are generally liable to pay service tax under the reverse charge mechanism and should pay tax with interest promptly. Refund eligibility requires that the service be approved for authorised operations by the Approval Committee and listed via Form A-2; if approved, the SEZ unit may file for refund, but absence from the approved list makes refund difficult and may necessitate litigation supported by books and records. Recruitment services, by contrast, are not liable under RCM.