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Notifications & Circulars
Regarding SEZ – Service Tax Refund
Notice Date : 18 May 2011

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Regarding SEZ – Service Tax Refund Circular No.142/11/2011 - ST F. No.354 /30 /2011-TRU Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs Tax Research Unit North Block, New Delhi 18th May 2011 To Chief Commissioners of Central Excise and Service Tax (All), Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit), Commissioners of Service Tax (All), Commissioners of Central Excise and Service Tax (All). Madam/Sir, Subject: SEZ – Service Tax Refund -- regarding. Subsequent to the issuance of Notification 17/2011-ST dated 01. 03. 2011, representations have been received seeking clarification on certain doubts. These doubts and clarifications are as follows: Quick Links Submit Notifications QUESTIONS CLARIFICATIONS 1. To claim the refund arising out of service tax paid under section 66A, no proforma is prescribed in the notification; how to claim it? In the notification, there is no difference in treatment of service tax paid under section 66 and section 66A of Finance Act, 1994. Where refund arises, Table – A, in Form A-2 can be used for making a refund claim. All taxable services (under section 66 or section 66A) received by a SEZ Unit/Developer for the authorised operations, have been exempted in the first paragraph of notification 17/2011-ST, subject to conditions. In Paragraph 2, conditions attached to this exemption are prescribed. In terms of paragraph 2(a), refund route is the default option for all who intend to claim the exemption granted by the notification in its first paragraph. However, an exception is provided in the form of ab initio (upfront) exemption, to the ‘wholly consumed’ services. Services which fall outside the definition of ‘wholly consumed’
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(i) In the notification, what is the treatment for service tax paid on taxable services which do not fall in the category of “wholly consumed services”, and also are not ‘shared services’ ? Is refund available?

(ii) Whether in the case of category (iii) services referred in paragraph 2(a) of the notification, ‘proportionate refund’ applies to only ‘shared services’ i.e. services that are used both for SEZ (Special Economic Zone) authorised operations as well as DTA (Domestic Tariff Area) operations?

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only in the case of category (iii). which creates a difference between ‘standalone’ and ‘non-standalone’ SEZ Unit/Developer.UCSqmPYgd… . subject to other conditions. as they satisfy the following criteria: (i) Invoice is raised in the name of the SEZ Unit/Developer Recent Popular C omments Section 24 of the Banking Regulation Act. on the taxable services. (ii) For whom and for what purpose. Whether Approval by UAC is Yes. Diamond Dollar Account (DDA) & Resident Foreign Currency (RFC) Account . it is mentioned that the taxable services are supplied to the Subscribe to Notice Feed SEZ Unit/Developer for the authorised operations. Enter your email address (ii) Such services are approved by the ‘Unit Approval CAclubindia on Facebook Committee(UAC)’. Declaration in A-1 is required? Declaration in Form A-1 is required to be produced. under the SEZ law. from availing upfront exemption for wholly consumed services. It is clarified that only such services shall be considered as exclusively used by SEZ Unit/Developer.asp#. who fulfill the conditions of notification.Maintenance of Statutory Liquidity Ratio (SLR) RBI/2012-13/157 RBI/2012-13/156 Revised Capital Adequacy Framework for Off-Balance sheet items for NBFCs Clarifications Reduction in SLR Risk Management and Inter Bank Dealings Exchange Earner's Foreign Currency (EEFC) Account. restrict the non-standalone Units/Developers. Merely having an office in the DTA for purpose of liaison/business promotion. This is a one-time 2/4 www. to claim upfront exemption (after striking out the inapplicable portion).499 authorised operations. Thus exemption to services exclusively used for the authorised operations of SEZ Unit/Developer. upfront exemption is made available to all SEZ Units/Developers.Review of Guidelines Interest Rates on Deposits held in FCNR (B) Accounts Interest Rates on Rupee Deposits held in Domestic. for the authorised operations in SEZ or shared with DTA operations. (i) Does condition (c) prescribed in paragraph 2 of the notification. Income Tax 3. does not restrict a SEZ Unit from availing benefit extended to a standalone unit. Ordinary Non-Resident (NRO) and Non-Resident (External) (NRE) Accounts Prudential Norms for Off-balance Sheet Exposures of Banks or in the invoice. as specified in paragraph 2(a) itself. to claim benefit under the (UAC) of the SEZ determines goods notification? and services required for the authorised operations of a Unit/Developer. will continue to be available by way of refund. 5. provided in Form A-2 may be used.com/notice_circulars/-regarding-sez-service-tax-refund-4219. The expression refers to an entity which is carrying out business operations in SEZ and also DTA. Audit Students Accounts C ustom VAT C areer Service Tax C orporate Law Excise Shares & Stock Others Linkedin 4. 1949 . More Subscription Options » Twitter (iii) Receipt and use of such services in the authorised operations are accounted for in the Browse by Category books of accounts of the SEZ Unit/Developer.caclubindia.definition of ‘wholly consumed’ services can be categorized as those which are used exclusively by the SEZ Unit/Developer. To claim this refund. to a service provider. Hence approval of the UAC is necessary for availing the notification benefit. may be clarified. for the authorised operations. Para 2(d) of the notification is applicable to refund arising from ‘shared services’ only. as required for the Like 64. which fall under category (i) and (ii) of para 2(a) of the notification? In respect of category (i) and (ii) services listed in paragraph 2(a). Unit Approval Committee necessary. difference is created between standalone and nonstandalone SEZ Units/Developers. Meaning of the expression ‘who does not own or carry on any business other than the operations in the SEZ’ appearing in paragraph 2(a)(iii) of the notification. Table-A.

‘Exclusive use’ explained in clarification for question No. M. As another option. subject to fulfillment of other conditions mentioned in the notification. service tax paid on shared services that have not been refunded after applying the formula in paragraph 2(d). therefore. SEZ Developers will be using category (i) services listed in paragraph 2(a). TRU Tel: 011-23092634 www. may also be referred in this connection. if proportionate refund (by SEZ Unit) and cenvat credit (by DTA Unit) needs to be obtained. Generally. Whether on the basis of single invoice. 3. if originals are needed for other statutory purpose. Table-C in Form A-2. self-attested photocopies of the Declaration can be submitted to service provider to avail upfront exemption.caclubindia.2. he can avail exemption through refund route. a copy has to be retained by SEZ Specified Officer. 8. after receiving the refund.asp#. original invoices are needed for claiming refund. upfront exemption is available for these services. irrespective of whether the Developer is standalone or not.portion). 10. Available. consolidated refund claim can be filed. Hindi version to follow. refund route is also available. Kennedy) Director. for any verification. illustrates this aspect. 9.UCSqmPYgd… 3/4 . provided separate accounts are maintained for receipt and use of services for the authorised operations in SEZ Unit. If an entity is having multiple SEZ Units with a centralized service tax registration.com/notice_circulars/-regarding-sez-service-tax-refund-4219. which are exclusively used for the authorised operations in SEZ. Trade Notice/Public Notice may be issued. Field formations may be informed accordingly. then also similar system shall be followed. 7. and category (ii) services. In terms of the notification. relating to immovable property located within SEZ. (J. one can claim proportionate refund for SEZ Unit and balance as cenvat credit 2. shall be available to the DTA Units of the entity as cenvat credit? Whether consolidated refund claim under 17/2011-ST can be filed by an entity having more than one SEZ unit and a centralized service tax registration. Meaning of the expression “total turnover” found in paragraph 2(d) of the notification is not clear: whether it refers to turnover of SEZ Unit or the entity (including DTA and SEZ Unit). 6. Whether proportionate amount of Yes. This is a one-time Declaration. he cannot get refund of service tax based on the formula provided for shared services in paragraph 2(d) of the notification: therefore. This may be clarified. This is the way to calculate proportionate refund. Original Declaration can be retained with the SEZ Unit/Developer for business record or for production to the jurisdictional Central Excise/Service Tax authorities. on service tax paid on category (iii) services. if need be. On a single invoice. In the case of category (iii) services if Developer is standalone. Whether certified copies of invoices can be used for claiming refund. it may be explained how a Developer can claim exemption under the notification? Total turnover includes turnover of DTA Unit and also export turnover of SEZ Unit. upfront exemption is available. originals can be taken back on submission of copies certified by Chartered Accountant. If Developer is not standalone. A Developer may not have export turnover.

Interest Rates on Rupee Deposits held in Domestic.com...LawyersClubindia.. www.com/notice_circulars/-regarding-sez-service-tax-refund-4219.asp#.00Rs. Posted on 18 May 2011 Like 0 Tw eet 0 0 Share 0 You need to be logged in to post comment Comments (1) nitin wrote on 06 April 2012 i have heard that this notification has been withdrawn in may2011.... 1019.UCSqmPYgd… 4/4 .142/11/2011 . 1699.00 Navy Blue Polyester back to the top www. More Notification & Circulars from this category More newer Notification & Circulars .. 1949 . Reduction in SLR Risk Management and Inter Bank Dealings Exchange Earner's Foreign Currency (EEFC) Account.. Puma Trackpants Navy BlueShow Now!-40%Rs. Interest Rates on Deposits held in FCNR (B) Accoun... The Non-Banking Financial Company –Factors (Reserv. Members comments/posts and files are ow ned by contributors.caclubindia.kindly update. RBI/2012-13/157 RBI/2012-13/156 Revised Capital Adequacy Framework for Off-Balance.ST Source : ..Tel: 011-23092634 Notification No : Circular No.MBAclubindia. All trademarks and copyrights are held by respective ow ners..com | www. Section 24 of the Banking Regulation Act. Prudential Norms for Off-balance Sheet Exposures o.M.com Let us grow stronger by mutual exchange of Knowledge About We are Hiring Blog Advertise Terms of Use Disclaimer Privacy Policy Contact Us © 2012 CAclubindia.