Taxable services received by SEZ (Special Economic Zone) units (including unit under construction) and SEZ developers for consumption within the SEZ are exempt from service tax. [Please Refer : Notification No. 4 / 2004 - Service Tax dated 31-03-2004.]
Such exemption can be availed subject to the following conditions :-
I. The ‘developer’ has been approved by the ‘Board of Approvals’ to develop, operate and maintain the SEZ.
II.The unit of the SEZ has been approved by the development Commissioner or Board of Approvals, to establish the unit in the SEZ.
III. The developer or unit of a SEZ shall maintain proper account of receipt and utilisation of the said taxable services.
"Board of Approvals" means the combined Board of Approvals for export oriented unit and Special Economic Zone units, as notified in the Official Gazette, from time to time by the Government of India in the Ministry of Commerce and Industry.
"Developer" means a person engaged in development or operation or maintenance of Special Economic Zone, and also includes any person authorised for such purpose by any such developer.
“Special Economic Zone" means a zone specified as Special Economic Zone by the Central Government in the notification issued under clause (iii) of Explanation 2 to the proviso to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944).
[Please Refer : Notification No. 4 / 2004 - Service Tax dated 31-03-2004.]
Refund of Service Tax :
Refund of Service Tax paid on certain taxable services used in export of goods is permitted under notification 41/2007-ST. Refund of Service Tax would be allowed by the jurisdictional Deputy Commissioner/Assistant Commissioner of Central Excise and it is to be processed by the respective jurisdictional authority administering Service Tax law. Accordingly, it is clarified that claiming refund of Service Tax the SEZ units, should take Service Tax registration with the jurisdictional authorities and file their claims there. [Please Refer : Circular No. 105/8/2008 dated : 16/09/2008.]