Availability of benefit of service tax exemption

[Guest]

if any manufacturing unit having the certificate of 100 % export oriented unit which is issued by Noida Special Economic Zone(NSEZ) under Ministry of Commerce & Industry.Such type of certificate only issued by NEPZ. Manufacturing unit situated at Manesar in Gurgaon and also mentioned in that certificate. Can they avail the benefit of service tax exemption on the basis of that certificate? i am waiting your reply.

[Surender Gupta]

No, EOU units situated outside SEZ are not entitled to avail the exemption on the basis of certificate issued by the Development Commissioner of relevant SEZ. By merely contorlling authority is the same, an EOU can not become a SEZ unit.

[Brijesh Verma]

Your query needs a closer look at Notification No. 4/2004 dated 31.3.2004 which exempts from services tax net, all services which are rendered to (A)a developer of a SEZ or (B)a unit of SEZ. the basic condition for this exemption is that the services must be consumed within the SEZ itself. Therefore, the services rendered to a EOU situated outside the SEZ would not be eligible to avail this exemption.

AI Summary

Service tax exemption limited to services consumed within the SEZ; EOU outside SEZ not eligible. The exemption applies only where services are rendered to and consumed within an SEZ developer or unit; a certificate issued by an SEZ authority does not render an export oriented unit located outside the SEZ eligible, and mere common control does not satisfy the consumption-within-SEZ requirement.