Nasscom Community

Request for Inputs: Challenges being faced due to SEZ Instruction 95 dated 11th June 2019

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This is with regard to representations made by us on difficulties faced by SEZ units post issuance of Instruction 95 dated 11th June 2019 by Ministry of Commerce and Industry which restricts benefit of taxes on cafeteria, crèche, gymnasium and similar facilities. NASSCOM has made multiple representations to Ministry of Commerce and Industries as well as GST authorities on the difficulties faced by our Industry.

However, we wanted to understand and seek your inputs on any specific issues faced as a result of implementation of the Instruction.

Key issues that have been brought to our knowledge so far include the following:

  • Authorities seeking details of all procurements done in relation to such facilities/ amenities and demanding tax benefits claimed retrospectively, i.e. even for periods prior to the issuance of the Instruction;
  • Lack of clarity on what kind of amenities (other than those explicitly mentioned). The word ‘similar facilities’ is very wide and is being interpreted in different ways by officers at the ground level;
  • Denial of GST credit in the hands of SEZ units. In fact, to some extent the Instruction is also influencing position being adopted by authorities for non-GST units as well, where credit is proposed to be denied for cafeteria related expenses;
  • Denial of depreciation benefit on capital goods forming part of these facilities at time of exit on grounds that the units were not eligible to claim any benefit on the same at time import itself (retrospective application of Instruction).

We solicit your inputs on above issues or any additional issues being faced by you at the ground level on account of aforesaid instruction so that we can take it up with the concerned authorities for their immediate consideration.

We request you to share your inputs in the attached format with before December 10, 2021.

We look forward to hearing from you.