Please find attached a clarification issued by Ministry of Commerce regarding the Uniform list of services for SEZs under the GST regime.
The default list of services allows for exemption of service tax/ GST when they are rendered by the SEZ unit.
Upfront exemption from payment of taxes on authorised services is an indirect tax benefit extended to SEZ units for promotion of exports. For all other services which are not a part of the authorised list, SEZ units have to first pay taxes and then claim a refund.
To streamline the approval process, and minimise approvals, an uniform list was issued by Ministry of Commerce in consultation with Industry, under the service tax regime. However, the list was not grandfathered under the GST regime, leading to uncertainty for SEZ units, with potential denial of exemptions as companies file returns under GST regime, thereby denying a key benefit under SEZ scheme.
NASSCOM has been working with GST council, special working group as well as Ministry of Commerce, and had proposed reissuance of the default list of services under the GST regime to ensure continuity of benefits for SEZ units. While it has taken 6 months, the list has been issued and we hope this will address concerns of our sector.
We will continue to work with the Industry to update and make the list current, as companies operate in SEZs.