2025-VIL-2085-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Exemption from service tax, SEZ Act, overriding effect, services provided to SEZ units – Appellant provided rent-a-cab services to a SEZ unit for employee transportation without collecting service tax, believing these services were exempt under Notification No. 4/2004-ST dated 31.03.2004 - Department issued a show-cause notice alleging that the appellant had wrongly availed the exemption, as the services were not consumed within the SEZ - Whether the appellant is eligible for exemption from service tax for the rent-a-cab services provided to the SEZ unit – HELD - The SEZ Act is a self-contained Act that provides exemptions on taxes, duties, cess, drawbacks, and concessions on imports and exports of goods and on the supply of services to the developers and units within an SEZ for carrying on authorized operations. Section 51 of the SEZ Act provides for the overriding effect of the SEZ Act over anything inconsistent contained in any other law, which would include the Finance Act – The Section 26(1)(e) of the SEZ Act states that every developer and entrepreneur shall be entitled to exemption from service tax on taxable services provided to a developer or unit to carry on the authorized operations in an SEZ. The situs of rendering the services is not relevant in connection with carrying on the authorized operations, so long as the taxable services are provided to a developer or unit in an SEZ. Therefore, the said taxable services would be exempt from the whole of the service tax leviable thereon under Section 66 of the Finance Act as per the provisions of the SEZ Act and the rules framed thereunder - The appellant is eligible for exemption from service tax for the rent-a-cab services provided to the SEZ unit as per the overriding effect under Section 51 of the SEZ Act and the exemption provided by Section 26 of the SEZ Act – The impugned order is set aside and the appeal is allowed
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