Only contract for developing the SEZ is eligible for exemption. The works contractors, sub contractor executing the works in SEZ are eligible for exemption

Description: A.R.Com/2/2010.                                  Dated : 16-03-2011.

            Ref : 1) CCt’s Ref.No: PMT/P & L/A.R.Com/2005, Dated 13-04-05.

The Ruling of the authority, therefore it is only the contractor, who actually executes the works contract either for the SEZ unit or for a developer of the SEZ in the processing Zone of the SEZ, is eligible for exemption in terms of the provision in Sec.7A of the APVAT Act as amended w.e.f. 24.9.2008. In other words, the sales made by a dealer to a main contractor or a sub contractor executing works contracts in the processing zone of the SEZ are not eligible for exemption.

Source: Trade and Taxes volume no 18. Part no.3 march 2011. Page no. 149.

Our Comment: Only SEZ developments contracts are eligible for exemption but not those executed in SEZ