Pradeep Jain - Chartered Accountant

Dear Sir, As discussed with Mr . Suhail regarding query in Service Tax matter please find the facts of query as under: Fact of the case: 1.Mr. Shubh Agarwal(located in Non SEZ Tarritory) is providing IT Consultancy Service to Third Party (Also in Non SEZ Tarritory) .Actually Mr. Agrawal is providing service to a Unit Located in SEZ Tarritory through third Party. 2.Mr. Agarwal raising Bill to third Party for Agreed amount without including service tax and had Deposited service Tax for First Quarter by making reverse calculation on bills raised to third party. 3.Third Party obviously not Collecting service tax while raising bill to unit located in SEZ area. Clarification Required:- 1.Mr. Agarwal wants to know whether he is liable for service tax for further service provided in second quarter onwards. 2.If Mr. Agarwal is not liable for service tax then whether he can collect the amount paid in first quarter from Service Tax Department . In case of any further information required please do mention me.

In our opinion, Mr. Agarwal is liable to pay service tax on the services provided to third party irrespective of the fact that the third party provides services to SEZ for its authorised operations. Exemption is available to service providers directly providing services to SEZ and there is no exemption for sub-contractor. The relevant provision for studying the procedure for claiming exemption for services provided to SEZ unit is contained in notification no. 12/2013-ST dated 01.07.2013. {Query replied by CA Neetu Sukhwani}

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