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The Madra High Court stayed the act of removal of general insurance services on the ground that the development commissioner vested with power only to expand the list of services under Special Economic Zone (SEZ).
The bench of Justice Anita Sumanth has observed that as per Instruction No.79, the Development Commissioner is vested with the power only to expand the list of services, the act of curtailing the list by removal of General insurance services from the ambit of the default list services, also appears contrary to the parent Instruction, being Instruction No.79.
Background
The petitioner challenges Instruction No.1/2024 (SO-MEZ) dated 02.07.2024. The Instruction touches on the contents of the default list of Input Services for authorised operations under SEZ. The uniform list of services to be followed in SEZ was the subject matter of Instruction No.79, issued in F.No.D.12/19/2013-SEZ, by the SEZ Division, Government of India, Ministry of Commerce & Industry as early as on 19.11.2013. This Instruction contains a list of 58 services in the annexure, where ‘General insurance business services’ figures at S.No.26.
The applicability of that Instruction has been continuing post the Goods and Services Tax era by way of a Notification issued by the same authority on 02.01.2018.
There is a specific stipulation in Paragraph 4 of Instruction No.79 to the effect that Development Commissioners or Unit Approval Committees may expand the list to facilitate units/developers in their respective zones.
The Specified Officer of MEPZ-Chennai had, vide Instruction unilaterally proceeded to remove General Insurance services from the purview of default list of input services.
FAQs
Who can Expand List Of Services Under SEZ?
The Madra High Court in the case of Zoho Corporation Private Limited v Union of India and Others
stayed the act of removal of general insurance services on the ground that the development commissioner vested with power only to expand the list of services under Special Economic Zone (SEZ).
Which provision empowers commissioner to Expand List Of Services Under SEZ?
As per Instruction No.79, the Development Commissioner is vested with the power only to expand the list of services, the act of curtailing the list by removal of General insurance services from the ambit of the default list services, also appears contrary to the parent Instruction, being Instruction No.79.
Can Commissioner remove removal of general insurance services from the list?
The Madra High Court in the case of Zoho Corporation Private Limited v Union of India and Others
stayed the act of removal of general insurance services on the ground that the development commissioner vested with power only to expand the list of services under Special Economic Zone (SEZ).
Conclusion
The court noted that prima facie and insofar as the Instruction, based on which the list of input services has been notified, is issued by the Government of India, the assumption of jurisdiction by a Specified Officer to amend the same, is itself suspect.
The stayed the operation of the Instruction until orders and listed the matter on 30.08.2024.
Case Title: Zoho Corporation Private Limited v Union of India and Others
Case No: WP.NO.22132 OF 2024
Date: 01.08.2024
