The government has broadened the ambit of services exempted from service tax for Special Economic Zones as services provided to these zones even from outside would not be taxable.
The government has exempted the taxable services 'whether or not the said services are provided inside the Special Economic Zone', the Central Board of Excise and Customs said in a notification issued on Wednesday.
Currently, services provided physically in the SEZ like security and others are exempt from tax, while those provided by advertising agencies, management consultants and others from outside the zone are not.
The move to broaden the ambit of tax exemption even to services not physically provided in the SEZ will reduce the cost of production.
However, the process has been made lengthy as the service tax has to be paid first and then refund can be claimed, an expert said.