Exemption to sub-contractors in SEZ

[Rajeev Kalra]

Are sub-contractors exempted from Service tax for providing services to main contractor who in turn provides services to SEZ develpoer.

[Rama Krishana]

Sub contractors are not exempted as such. It the services that is being provided by the sub-contractor would determine whether the same is exempt or not. If you services are being provided by the sub contractor wholly within SEZ, the same will be exempt from service tax. But if the services are provided outside SEZ, sub contractor will be required to pay service tax.

AI Summary

SEZ service exemption: subcontractor services wholly within SEZ are exempt; otherwise subject to service tax. Subcontractors are not automatically exempt from service tax; exemption depends on the place of provision. Services provided wholly within the SEZ are exempt from service tax, whereas services performed outside the SEZ remain subject to service tax liability.