We all are aware that the services provided to a unit located in SEZ or a developer of SEZ are exempted from service tax by way of Notification No 12/2013-ST dated 01.07.2013 subject to certain conditions, limitations and safeguards as specified in the said notification.
The notification provides for ab intio exemption from service tax for such specified services received by SEZ unit or developer which are exclusively used for authorised operations of the SEZ. Further, the service tax pertaining to such services which are not used exclusively for authorised operations of the SEZ shall be allowed by way of refund subject to certain conditions as mentioned below.
The said notification vide Para III (a) states that the services which are common to the authorised operations of the SEZ and the operation in the DTA Unit shall be distributed among the SEZ Unit and the DTA Unit in the manner as prescribed in Rule 7 of Cenvat Credit Rules, 2004. That is to say the SEZ unit or developer can only claim refund of the service tax which is in proportion to the turnover of the SEZ Unit and credit of service tax in proportion to the turnover of DTA Unit shall not be allowed.