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Section 8(6),8(7) and 8(8) of the CST Act deals with the exemptions available to a

SEZ unit or SEZ developer from CST. When goods are sold to a SEZ unit or SEZ

developer then no CST is payable by such unit or developer as per the above sub

sections subject to fulfillment of certain conditions. The conditions and forms

relating to such exemption are provided as follows for the benefit of all concerned.

What is SEZ: Before discussing the relevant provisions one need to understand

what SEZ means. Full form of SEZ is Special Economic Zone. These are designated

areas in countries that possess special economic regulations that are different from

other areas in the same country. Moreover, these regulations tend to contain

measures that are conducive to foreign direct investment. Conducting business in a

SEZ usually means that a company will receive tax incentives and the opportunity

to pay lower tariffs.

It is set up for export purposes. Such zone is treated as if it is a foreign country

within India. Units in SEZ can import raw materials and capital goods without

payment of customs duty and also procure them without payment of excise duty.

All the products of a SEZ unit should be exported and if their final product is sold in

India, excise duty equal to normal customs duty on such goods is required to be

paid.

As per explanation to section 8(8) of CST Act the expression "special economic

zone" has the same meaning assigned to it in clause (iii) to Explanation 2 to the

proviso to section 3 of the Central Excise Act, 1944, which defines Special Economic

Zone as a zone which the Central Government may, by notification in the official

gazette, specify in this behalf.

Conditions for exemptions: Following conditions must be satisfied so as to claim

exemption u/s 8(6) of CST Act.

1.The exemption from CST is available only if the sale is to developer of SEZ or unit

in SEZ. Section 8(6) was amended w.e.f 10-09-2004, to extend the exemption to

developer of SEZ also. Earlier the exemption was available only to the units in

SEZ.

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2. The SEZ unit can obtain goods for purpose of manufacturing, trading, production,

processing, assembling, repairing, reconditioning, re-engineering, processing,

packaging or for use as or packing material or packing accessories.

Whereas the Developer of SEZ can obtain goods for development, setting up,

operation and maintenance of the zone.

3. The registered dealer in SEZ (developer of SEZ or SEZ unit as the case may be)

should have been authorized to establish such unit in SEZ by authority specified by

Central Government. Its the Development commissioner of SEZ who is authorized

to permit a person to set up unit in SEZ.

4. As per section 8(7) of CST Act the goods which the developer of SEZ or unit in

SEZ can obtain without CST must be mentioned in the sales tax registration

certificate of SEZ unit. Thus the sales tax registration certificate must be amendedto include all these items which can be obtained without CST, in the certificate.

5. As per section 8(8) of CST Act the purchasing dealer has to submit the

prescribed declaration(form I) to the authority prescribed u/s 8(4) (i.e assessing

officer), obtained from Development Commissioner by the selling dealer and issued

to the purchasing dealer by him.

Thus SEZ developer or SEZ unit will supply I form signed by himself. This I form

in original should be submitted to the assessing authority by the selling dealer so as

to prove that the goods have been sold to a SEZ developer/SEZ unit and

consequential CST exemption.

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Notifications & Circulars

Processing of returns of A.Y. 2010-11 - Section 143 of the Income-tax Act, 1961 Steps to clearbacklogNotice Date : 09 February 2011

Processing of returns of A.Y. 2010-11 - Section 143 of the Income-tax Act, 1961 Stepsto clear backlog

INSTRUCTION NO. 2/2011 [F.NO.225/25/2010/ITA-II]DATED 9-2-2011

The issue of processing of returns for Asst. year 2010-11 and giving credit for TDS has beenconsidered by the Board. In order to clear the backlog of returns, the following decisions have

been taken:

(i) In all returns (ITR-1 to ITR-6), where the difference between the TDS claim andmatching TDS amount reported in AS-26 data does not exceed Rs. 1 lac, the TDS claim may

be accepted without verification.(ii) Where there is zero TDS matching, TDS credit shall be allowed only after due

verification. However, in case of returns of ITR-1 and ITR-2, credit may be allowed in full,even if there is zero matching, if the total TDS claimed is Rs. five thousand or lower.

(iii) Where there are TDS claims with invalid TAN, TDS credit for such claims is not to beallowed.

(iv) In all other cases TDS credit shall be allowed after due verification.

Notification No : INSTRUCTION NO. 2/2011

Amends the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995

[TO BE PUBLISHED IN THE GAZETTE OF INDIA,EXTRAORDINARY, PART-II, SECTION 3, SUB-SECTION (i)]GOVERNMENT OF INDIAMINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 9 / 2011 - Customs (N.T.)New Delhi, the 10th February, 2011

G.S.R. 80 (E). - In exercise of the powers conferred by section 75 of the Customs Act, 1962 (52 of1962), section 37 of the Central Excise Act, 1944 (1 of 1944) and section 93A read with section 94of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rulesfurther to amend the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995,namely:-

1. (1) These rules may be called the Customs, Central Excise Duties and Service TaxDrawback (Amendment) Rules, 2011.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995,-

(i) in rule 3, in sub-rule (1), in the second proviso, in clause (v), for the words and figures falling within heading 1006, 2523, 5205, 5206 or 5207, the words and figures falling withinheading 0401, 0402, 0403, 0404, 0405, 0406, 1006, 2523, 3501, 5205, 5206 or 5207 shall besubstituted. ;

(ii) in rule 6, in sub-rule (4), for the words and figures falling within heading 1006,

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2523, 5205, 5206 or 5207, the words and figures falling within heading 0401, 0402, 0403, 0404,0405, 0406, 1006, 2523, 3501, 5205, 5206 or 5207 shall be substituted. ;

(iii) in rule 7, in sub-rule (5), for the words and figures falling within heading 1006,2523, 5205, 5206 or 5207, the words and figures falling within heading 0401, 0402, 0403, 0404,0405, 0406, 1006, 2523, 3501, 5205, 5206 or 5207 shall be substituted.

F. No. 609/25/2011-DBK

(RAJESH KUMAR AGARWAL)Under Secretary to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3,Sub-section (i), vide number G.S.R.441(E), dated the 26th May, 1995, and was last amended bynotification number 49/2010-Customs (N.T.), dated the 17th June, 2010 vide number G.S.R. 520(E), dated the 17th June, 2010.

Notification No : Notification No. 9 / 2011 - Customs (N.T.)