Refund of Service Tax on Outdoor Catering to SEZ unit under Notification 12/2013

[Sanketh Meri]

Dear All,

We are an SEZ unit receiving Outdoor catering services on which service tax is charged. The Caterer is providing food at the dormitory outside Sez unit to all employees brought from villages. All employees staying at dorm are from villages and catering of food is an essential facility to be provided to employees without which they will not come and stay in the dorm. As it is a commercial compulsion and welfare activity, whether refund of service tax on such catering service can be claimed under Notification12/2013 read with SEZ Act and Rules (ie Section 7 & 26 read with Rule 27(3) and 31)?

The service tax authorities are not allowing this under Rule 27(3) of Sez Act.

Please provide your comments on the same

AI Summary

SEZ Unit Challenges Denial of Service Tax Refund on Catering Services Under Notification 12/2013 and Rule 27(3) A Special Economic Zone (SEZ) unit is seeking a refund of service tax on outdoor catering services provided to its employees, who reside in a dormitory outside the SEZ. The query revolves around whether this service qualifies for a tax refund under Notification 12/2013, considering the SEZ Act and Rules. The service tax authorities have denied the refund under Rule 27(3). Respondents in the forum suggest that the service should be considered an export of service, thus eligible for exemption, and recommend pursuing an appeal if the claim is rejected.