No Service tax for Units located inside SEZ ,or,Developer of SEZ for authorised operations. It is for specified services and consumed wholly inside SEZ. It is by way of way of refund of service tax paid on the specified services received for the authorised operations in a SEZ.Further , it is optional that this notification can also availed by reverse charge method by not paying Service Tax.
Notifications is re-produced for easy reference and for more clarity:
Notification No. 17/2011 – Service Tax New Delhi, the 1st March, 2011
G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 93 of the
Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act) read with sub-section 3 of
section 95 of Finance (No.2), Act, 2004 (23 of 2004) and sub-section 3 of section 140 of the Finance
Act, 2007(22 of 2007) and in supersession of the notification of the Government of India in the
Ministry of Finance (Department of Revenue), No. 9/2009-Service Tax, dated the 3rd March, 2009,
published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R.146(E),
dated the 3rd March, 2009, except as respects things done or omitted to be done before such
supersession, the Central Government, on being satisfied that it is necessary in the public interest so to
do, hereby exempts the taxable services specified in clause (105) of section 65 of the Finance Act,
chargeable to tax under section 66 or section 66A of the Finance Act , received by a Unit located in a
Special Economic Zone (hereinafter referred to as SEZ) or Developer of SEZ for the authorised
operations, from the whole of the service tax, education cess and secondary and higher education
cess leviable thereon.
2. The exemption contained in this notification shall be subject to the following conditions,
namely:-
(a) the exemption shall be provided by way of refund of service tax paid on the specified services
received for the authorised operations in a SEZ:
Provided that where the specified services received and used for authorised operations are wholly
consumed within the SEZ, the provider of such services or the receiver of such services on reverse
charge basis, as the case may be, has the option not to pay the service tax ab initio instead of the Unit
or Developer claiming exemption by way of refund in terms of this notification.
Explanation.- For the purposes of this notification, the expression ―wholly consumed‖ refer to
following taxable services, received by a Developer or Unit of a SEZ, for the authorised operations,
namely:-
(i) services listed in clause(i) of sub-rule (1) of rule 3 of the Export of Services Rules, 2005
in relation to an immovable property situated within the SEZ; or
(ii) services listed in clause (ii) of sub-rule (1) of rule 3 of the Export of Services Rules, 2005,
as are wholly performed within the SEZ; or
(iii) services other than those falling under (i) and (ii) above, provided to a Developer or Unit
of SEZ, who does not own or carry on any business other than the operations in the SEZ;
(b) for the purpose of claiming exemption, the Developer or Unit of SEZ shall obtain a list of
taxable services as are required for the authorised operations approved by the Approval Committee
(hereinafter referred to as the specified services) of the concerned SEZ;
(c) the Developer or Unit of SEZ who does not own or carry out any business other than SEZ
operations, shall furnish a declaration to that effect in Form A-1, verified by the Specified Officer of
the SEZ, in addition to obtaining list under condition (b) above, for the purpose of claiming
exemption;20
(d) where the specified services received by Unit or Developer, are not wholly consumed within
SEZ, i.e., shared between authorised operations in SEZ Unit and Domestic Tariff Area(DTA) Unit,
refund shall be restricted to the extent of the ratio of export turnover to the total turnover for the given
period to which the claim relates, i.e.,
service tax paid on specified services
used for SEZ Authorised Operations X Export turnover of SEZ Unit
shared with DTA Unit for the period for the period
Maximum refund = ----------------------------------------------------------------------------------------
Total turnover for the period
Explanation.- For the purposes of condition (d),-
(1) ―total turnover‖ means the sum total of the value of,-
(i) all output services and exempted services provided, including the value of services
exported;
(ii) all excisable and non-excisable goods cleared, including the value of the goods exported;
(iii) bought out goods sold,
during the period to which the invoices pertain and the exporter claims the facility of refund under
this notification.
(2) ―turnover of SEZ Unit‘‘ shall mean the sum total of the value of final products and output
services exported during the period of which the invoices pertain and the exporter claims the
facility of refund under this notification;
(e) any Developer or Unit of SEZ claiming the exemption shall declare that the specified services
on which exemption and/ or refund is claimed to have been actually used for the authorised
operations;
(f) the Developer or unit of SEZ claiming the exemption, by way of refund has actually paid the
amount indicated in the invoice, bill or as the case may be, challan, including the service tax payable,
to the person liable to pay the said tax or the amount of service tax payable under reverse charge, as
the case may be, under the provisions of the Finance Act;
(g) no CENVAT credit of service tax paid on the specified services used for the authorised
operations in a SEZ has been taken under the CENVAT Credit Rules, 2004;
(h) exemption or refund of service tax paid on the specified services other than ‗wholly
consumed‘ services used for the authorised operations in a SEZ shall not be claimed except under this
notification;
(i) the developer or unit of a SEZ, who intends to avail exemption and or refund under this
notification, shall maintain proper account of receipt and use of the specified services on which
exemption is claimed, for authorised operations in the SEZ.
3. The following procedure should be adopted for claiming the benefit of the exemption
contained in this notification, namely:-21
(a) the Developer or Unit of a SEZ, who has paid the service tax under sections 66 of the Finance
Act, shall avail the exemption by filling a claim for refund of service tax paid on specified services
used for the authorised operations;
(b) the Developer or Unit of a SEZ who is registered as an assessee under the Central Excise Act,
1944 (1 of 1944) or the rules made there under, or the said Finance Act or the rules made there under,
shall file the claim for refund to the Assistant Commissioner of Central Excise or the Deputy
Commissioner of Central Excise, as the case may be, having jurisdiction over the SEZ or registered
office or the head office of the Developer or Unit, as the case may be, in Form A-2;
(c) the Developer or Unit of a SEZ who is not so registered under the provisions referred to in
clause (b), shall, before filing a claim for refund under this notification, file a declaration with the
Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case
may be, having jurisdiction over the SEZ or registered office or the head office of the Developer or
Unit, as the case may be, in Form A-3;
(d) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise,
as the case may be, shall, after due verification, allot a service tax code number to the Developer or
Unit of SEZ, referred to in clause (c), within seven days from the date of receipt of the said
declaration, in Form A-3;
(e) claim for refund shall be filed, within one year from the end of the month in which actual
payment of service tax was made by such developer or unit to the registered service provider or such
extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of
Central Excise, as the case may be, shall permit;
(f) the refund claim shall be accompanied by the following documents, namely:-
(i) a copy of the list of specified services as are required for the authorized operations in the
SEZ, as approved by the Approval Committee; wherever applicable, document specified in 2(c),
i.e. , declaration in Form A-1;
(ii) invoice or a bill or as the case may be, a challan, issued in accordance with the provisions of
Finance Act or rules made thereunder, in the name of the Developer or Unit of a SEZ, by the
registered service provider, along with proof of payment for such specified services used for the
authorised operations and service tax paid, in original;
(iii) a declaration by the Developer or Unit of SEZ, claiming such exemption, to the effect that—
(A) the specified services on which refund of service tax claimed, has been actually used for
the authorized operations in the SEZ ;
(B) proper account of the specified services received and used for the authorised operations
are maintained by the developer or unit of the SEZ and the same shall be produced to the officer
sanctioning refund, on demand;
(C) accounts or documents furnished by the Developer or Unit as proof of payment of
service tax claimed as refund, based on the invoice, or bill , or as the case may be challan issued by
the registered service provider indicating the service tax paid on such specified services, are true and
correct in all respects;22
(g) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise,
as the case may be, after verifying that,-
(i) the refund claim is complete in all respects;
(ii) the information furnished in Form A-2 and in supporting documents correctly indicate the
service tax involved in the specified services used for the authorised operations in the SEZ,
which is claimed as refund, and has been actually paid to the service provider,
shall refund the service tax paid on the specified services;
(h) a service provider, shall provide the specified services falling under ‗wholly consumed‘
category, under exemption granted by this notification, to a Developer or Unit of SEZ, for authorised
operations, subject to the production of documents specified in sub-para (b) of para 2 and in addition
wherever applicable, documents specified in sub-para (c ) para 2, i.e., declaration in Form A-1;
(i) where any refund of service tax paid on specified services is erroneously refunded for any
reasons whatsoever, such service tax refunded shall be recoverable under the provisions of the said
Finance Act and the rules made there under, as if it is recovery of service tax erroneously refunded;
4. Words and expressions used in this notification and defined in the Special Economic Zones
Act, 2005 (28 of 2005) or the rules made thereunder, shall apply, so far as may be, in relation to
refund of service tax under this notification as they apply in relation to a SEZ.
Explanation.- For the purposes of this notification, ―statutory auditor‖ refers to a Chartered
Accountant who audits the annual accounts of the Developer or Unit of a SEZ for the
purposes of the Companies Act, 1956 (1 of 1956) or the Income Tax Act, 1961(43 of 1961).
FORM A-1
DECLARATION BY DEVELOPER OR UNIT OF SEZ WHO DOES NOT OWN OR CARY ON
ANY BUSINESS OTHER THAN OPERATIONS IN THE SEZ, FOR AVAILING EXEMPTION
UNDER NOTIFICATION No._____ DATED ____ [Refer paragraph 2(c)]
1. Name of the SEZ Unit/Developer:
2. Address of the SEZ Unit/Developer with Telephone and Email:
3. Permanent Account Number(PAN) of the SEZ Unit/Developer:
4. Import and Export Code Number:
5. Jurisdictional Central Excise/Service Tax Division:
6. Service Tax Registration Number/Service Tax Code:
7. Declaration: I/We hereby declare that-
(i) The information given in this application form is true, correct and complete in every
respect and I am authorised to sign on behalf of the SEZ Unit/Developer;23
(ii) I/We maintain proper account of specified services, as approved by the Approval
Committee of SEZ, received and used for authorised operations in SEZ; I/we shall make
available such accounts and related records, at all reasonable times, to the jurisdictional
Central Excise Officers for inspection or scrutiny.
(iii) I/We shall use/have used specified services for authorised operations in the SEZ.
(iv) I/We declare that we do not own or carry out any other business of providing taxable
service or manufacture, in the domestic tariff area; I/We are aware that the Declaration is
valid only for the purpose specified in Notification _______ dated ______ and is subject
to conditions.
(v) This declaration is intended for submission to the following DTA service provider(s):
Sl.No. Description of Specified
Service(s) to be received
from the DTA service
provider(s)
DTA Service provider(s) who provide(s) the
specified service(s), for SEZ authorised
operations
Name and address Service Tax
Registration No.
(1) (2) (3) (4)
Signature and Name of Authorised Person with stamp
Date:
Place:
I have verified the above Declaration; it is correct
Signature, date and stamp of the Specified Officer of the SEZ (Specified Officer shall retain a
copy of the verified Declaration, for the purpose of record)
FORM A-2
APPLICATION FOR CLAIMING REFUND OF SERVICE TAX PAID ON SPECIFIED SERVICES
USED FOR AUTHORISED OPERATIONS IN SEZ
To
The Assistant/Deputy Commissioner of Central Excise/Service Tax
___________ Division, _______ Commissionerate
Sir,
I /We claim refund of Rs.................. (Rupees in words)
(a) in respect of service tax paid on ‗wholly consumed‘ specified services used for the
authorized operations in SEZ, as approved by the Unit Approval Committee of the
_________ SEZ [ Rupees ____________]
(b) in respect of service tax paid on specified services, other than those that are wholly consumed,
used for the authorized operations of SEZ Unit/Developer, as approved by the Unit Approval
Committee of the _________ SEZ [ Rupees ____________].
1. Name of the SEZ Unit/Developer:
2. Address of the SEZ Unit/Developer with Telephone and Email:
3. Address of the Registered/Head Office with Telephone and Email:
4. Permanent Account Number(PAN) of the SEZ Unit/Developer:
5. Import and Export Code Number:24
6. Jurisdictional Central Excise/Service Tax Division:
7. Service Tax Registration Number/Service Tax Code:
8. Information regarding Bank Account ( Bank, Address of Branch, Account Number) in which
refund amount should be credited/to be deposited:
9. Details regarding Service Tax refund claimed:
9.1.Refund arising out of ‗wholly consumed‘ specified services:
Table-A
9.2.Refunds arising out of specified services, other than those are ‗wholly consumed‘:
I/We request refund of service tax paid on specified services, other than those that are ‗wholly
consumed‘,-
(a) used in the manufacture of final products exported from SEZ
(b) used in providing output services exported from SEZ
I/We furnish following true and correct particulars, in Tables ‗B‘ and ‗C‘, for the purpose of above
refund:
Table – B
No. Details regarding specified services used in the authorized operations of
SEZ, as approved by the Unit Approval Committee
Amou
nt of
servic
e tax
claime
d as
Refun
d(
includ
ing
educat
ion
cess)
(Rupe
es)
Document
enclosed as
proof of
payment of
service tax
by the SEZ
Unit/Devel
oper, ( sl.no
and date of
invoice/ bill
/ challan)
Descripti
on of
taxable
service
used in
the
authorize
d
operation
s of SEZ
Classifica
tion under
section
65(105)
of the
Finance
Act, 1994
Name
and
addre
ss of
Servic
e
Provi
der
Service
Tax
Registrat
ion
Number
of
Service
Provider
Invoice/Bill/Challan
(original enclosed)
Amount
of
Service
tax paid
(includi
ng
educatio
n cess)
(Rupees
(
Num
ber
Da
te
Value
of
taxabl
e
servic
e
(Rupe
es)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
1.
2.
TOTAL --
No. Specified services used for authorised operations in SEZ Unit shared with
Domestic Tariff Area Unit during the period for which refund is claimed[para
2(d)of the notification]
Document
enclosed as
proof of
payment of
service tax (
sl.no and date
of invoice/ bill
/ challan)
Descripti
on of
taxable
service
used in
the
authorize
d
Classifica
tion
under
section
65(105)
of the
Finance
Act, 1994
Name
and
address
of
Service
Provid
er
Service
Tax
Registr
ation
Numbe
r of
Service
Provide
Invoice/Bill/Challan
(original enclosed)
Amount
of Service
tax paid
(including
education
cess)
(Rupees)
Num
ber
Date Value
of
taxabl
e
servic25
(Table - C)
Details
Details for the period to which the invoices pertain and
refund is claimed
Export turnover of
SEZ Unit(s)
Turnover of DTA
unit(s)
Total
turnover
(1) (2) (3) = (1) +
(2)
Final products (a)
Output services (b)
Others(Bought out
goods sold)
(c )
----
Total (a)+(b)+(c)=(d)
Instructions for compilation of the above statistical table:
(i) To calculate the export turnover of SEZ, in the case of export of goods, FOB value provided in
Shipping Bills or Bills of Export, should be taken into account, which have been duly certified
by the officer of customs to the effect that the goods have in fact been exported;
(ii) To calculate the export turnover of SEZ, in the case of export of services, value of output
services exported shall be on the basis of certificates issued by the bank certifying realization of
export proceeds.
(iii) Amount of service tax claimed as refund, under Table B read with Table C:
Rupees__________________
(iv) Particulars filled in the Table C should be verified and certified as true by the statutory auditor
of the SEZ Unit
------------------------------------------------------------------------------------------------------------------
10. I/We Declare that-
(i) information given in this application for refund is true, correct and complete in every
respect and that I am authorised to sign this application for refund of service tax;
(ii) the specified services, as approved by the Approval Committee of SEZ, on which
exemption/refund is claimed are actually used for the authorised operations in a SEZ;
(iii) refund is being claimed only on the service tax actually paid on the specified services
used for the authorised operations in a SEZ; we have not claimed nor received any
refund of service tax earlier, on the basis of above documents/information.
(iv) We have not taken any CENVAT credit of service tax paid on the specified services
under the CENVAT Credit Rules, 2004;
(v) accounts or documents furnished as proof of payment of service tax being claimed as
refund, as per the invoice, bill or challan of the service provider indicating the service
tax paid on such specified services, are true and correct in all respects;
(vi) proper account of receipt and use of the specified services on which
exemption/refund is claimed, for the authorised operations in the SEZ, is maintained
and the same shall be produced to the Officer sanctioning refund, on demand.
Signature and name
(of proprietor/managing partner/
operation
s of SEZ
r e
(Rupe
es)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1.
2.
TOTAL --26
person authorised by managing director of SEZ Unit/Developer)
with complete address, telephone and e-mail
Date:
Place:
FORM A-3
DECLARATION FOR OBTAINING SERVICE TAX CODE
[Refer paragraph 3(c)]
1. Name of the SEZ Unit/Developer:
2. Address of the SEZ Unit/Developer with Telephone and Email:
3. Address of the Registered/Head Office:
4. Permanent Account Number(PAN) of the SEZ Unit/Developer:
5. Import and Export Code Number:
6. Jurisdictional Central Excise/Service Tax Division:
7. Service Tax Registration Number/Service tax Code:
8. Details of Bank Account ( Bank, Address of Branch, Account Number)
9. (a) Constitution of SEZ Unit/Developer [ proprietorship/partnership/Registered Private
Limited Company/Registered Public Limited Company/Others(specify)]
(b) Name, Address, Telephone number of Proprietor/partner/director(s)
10. Name, designation and address of the authorised signatory/signatories
11. I/We hereby declare that-
(i) The information given in this application form is true, correct and complete in every
respect and that I am authorised to sign on behalf of the SEZ Unit/Developer;
(ii) I/We shall maintain proper account of specified services as approved by the Approval
Committee of SEZ, received and used for authorised operations in SEZ; and shall
make available such accounts and related records, at all reasonable times, to the
Department for inspection or scrutiny.
(iii) I/We shall use/have used specified services for authorised operations in the SEZ.
Signature and Name of Authorised Person with stamp
Date:
Place:
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