SERVICE TAX EXEMPTION FOR SERVICES TO CSEZ ,

[SINI BINU MANAGER-AACOUNTS]

Sir.

we are one of the service provideres to CSEZ unit/developer,earlier the service is exempted from service tax and hence we can claim this service as exempted.But i came to know that it is ammended that service tax provider is liable to provide service tax bill to the CSEZ uNITS AND THEY CAN ONLY CLAIM REFUND FOR THE SAME.kINDLY ADVISE.wE ARE PROVIDING THE SERVICES TO THE DEVELOPMENT COMMMISSIONER,CSEZ.

[YAGAY and SUN]

This amendment was brought vide finance bill 2011.

[sv bhasker]

Sir,

The notification no 17/2011 ST exempts services received by SEZ unit in two ways. 

1. Exemption by way of refund of service tax paid. The SEZ unit cliams refund from jurisdictional CE Authorities, after paying the tax billed to them by service provider.

2. Exemption from payment of service tax in respect of services consumed within the SEZ as per the categories of Export of service Rules . 

So,  the nature of service provided  will decide whether u r  elible for refund method of exemption or straight exemption.

It may be noted that exemption is availble to authorised operations that are  duly approved only.

AI Summary

Service tax exemption: SEZ units claim refund when billed tax, while services consumed within the SEZ may be exempt from payment.
The amended regime requires suppliers to invoice service tax to SEZ units in some cases, with SEZ units claiming refund thereafter (exemption by way of refund), while other services consumed within the SEZ qualify for exemption from payment under the Export of Service Rules. The applicable method depends on the nature of the service, and relief is available only to authorised, approved SEZ operations.