Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: list of goods taxed at 4% :: cpt :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: VAT Audit :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: empanelment :: TDS
 
 
« News Headlines »
 Deadline to file returns extended to 28 August for biz with transitional
 GST input tax credit form
  How to rectify income tax returns
 Govt extends tax exemption for industry in North East, hilly states
 Should you file revised Income Tax returns; find out here
 Tax Deducted at Source (TDS) in Goods & Services Tax (GST)
 10 companies that blamed GST for soft June quarter
 How will GST impact the Indian economy
 10 days left to file your first GST return. This is how you do it
 What is property tax and how is it calculated…
 File income tax returns in time to carry forward losses

SEZ units and developers can clain refund for tax
March, 05th 2009

Special Economic Zones (SEZ) units and developers will now be able to claim refund for tax paid on all input services, irrespective of
whether they are consumed inside or outside the zone.

The governments decision to refund taxes implies that all developers and units in SEZs will now have to first pay a tax on services consumed and then get a refund from the tax authorities.

Till now, the government exempted developers from paying a tax on services that were consumed within the zone. So while services used within the zone were exempted from taxes those consumed outside the SEZ attracted taxes.

Service tax is levied at the rate of 10%. Some of the serviced that units and developers use outisde the zone include courier service, transport service among others.

While the industry has welcomed the move to refund tax on services consumed outsides the zone, it wants the government to give a blanket exemption.

L B Singhal, director general, Export Promotion Council for Export oriented Units and SEZs says: "SEZ Act provides ab-initio exemption from service tax whereas the notification has provided exemption from service tax by way of refund of service tax.

Hence, service tax has to be paid first and then refund has to be claimed. It would result into unnecessary blockage of funds, paper work and transaction cost. Hence it would be appropriate if ab-initio exemption could be provided".

Says Bipin Sapra, associate director, Ernst & Young: "This notification puts to rest the ambiguity which existed regarding whether the services were actually being consumed in a SEZ or not. However, by allowing the exemption by way of a refund the government has not only increased the transaction cost but also increased the cash outflow of SEZ units".

The new finance ministry notification exempts services used for authorised operations within SEZs, but, developers and units will have to first pay service tax and then claim it back as a refund through the specified mechanism.

Authorised operations are the government approved activities that can be undertaken within a zone. The refund can be claimed by SEZ unit or developer within 6 months from the date of payment of service tax.

The new provision also overrides the tax exemption provided in the SEZ Act. "The notification implies that service tax would now be reimbursed over 6 months for both services consumed within and outside the zone for authorized operations," said Anita Arjundas, chief operating officer, Mahindra World City Developers.

The move to refund tax paid on services provided outside the zone comes following a decision in this regard by the empowered group of ministers on SEZs headed by finance and external affairs minister Pranab Mukherjee.

Refund of tax paid on services provided outside the zone has been a long-standing demand of SEZ unit owners and developers who had argued that they should not be made to pay tax on services consumed outside the export zone so long as the services were related to production within the SEZ.

The notification clears the ambiguity with regard to eligibility of the service tax exemption in case of input services consumed by SEZ units and developers, that were being disputed by the tax officials.

All the services required in relation to authorized operations of SEZ will have to be approved by approval committee of SEZ which would be called specified services.

Also, developers and unit holders would not be able to claim credit with regard to such input services. Developers and units would also have to give a declaration to claim the refund exemption, to the effect that such service is received by him in relation to authorised operations in SEZ.

The notification will come into effect on or after the date of publication of this notification in the Official Gazette.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions