Chargiability and liability of service tax

[SHANTI NARAIN]

Dear Sir, One of our client has entered into a contract for rendering architectural services with a company, which is going to build an IT Park in Chandigarh which is under SEZ. The company had applied to Commissioner of Special Economic Zone for the Certificate of Project under SEZ during F.Y 06-07 and given some advance to our client as architectural fee. Our Client had asked for service tax part but the Company's argument was that they have already applied for SEZ and waiting the certificate and SEZ is subject to service tax exemption (notification no 4/2004) and will not pay the same. The company got SEZ certificate from commissioner of special economic zone on 30th April,2007 for the above project. Now the query is:- Whether our client is liable to charge and pay service tax on fee received before getting certificate or not? Please advise. Thanks & Regards, Shanti Narain

AI Summary

Dispute Over Service Tax Exemption for Architectural Services in SEZ Before Certificate Issuance Cites Supreme Court Decision A client provided architectural services for a company building an IT Park in a Special Economic Zone (SEZ) in Chandigarh. The company argued it was exempt from service tax under notification 4/2004, as they applied for an SEZ certificate during the fiscal year 2006-07, though the certificate was issued on April 30, 2007. The client questioned if they must charge service tax on fees received before the certificate issuance. One response argued the exemption was inapplicable before SEZ registration, while another suggested the exemption should apply liberally, referencing a Supreme Court decision.