SEZ units demand procedural changes for refund of service tax
March, 05th 2009
Welcoming the government&aposs decision to broaden the ambit of services exempted from tax for SEZs, Export Promotion Council for EOUs and SEZs today said the Finance Ministry should also streamline the procedure to encourage exports.
The Export Promotion Council for EOUs and SEZs (EPCES) Director General L B Singhal here said as per the Finance Ministry notification service tax has to be paid first and then refund has to be claimed.
"It will result into unnecessary blockage of funds, paper work and transaction cost. Hence it would be appropriate if ab-initio exemption could be provided," Singhal said.
At present services under the ambit of SEZs are already exempted from service tax." This needs to be clarified that on services rendered within SEZ, no service tax is to be paid,"he said.
A specific time frame of maximum of seven days should be provided for the refund of service tax, he said adding that the tax refund should be provided either from the office of the Development Commissioner in the zone or from Customs officer posted in the zone.
"SEZ units or developers must not be asked to go outside the SEZ for taking this refund, Singhal added.
The government, so far, has given formal nod to 513 SEZs, of which 250 have been notified and 87 zones are operational.