The Madras High Court has stayed the instructions and held that the development commissioners cannot expand the default list of input services for authorised operations under Special Economic Zone (SEZ).
Facts
The petitioner challenges Instruction No.1/2024 (SO-MEZ) dated 02.07.2024. That Instruction touches on the contents of the default list of Input Services for authorized operations under SEZ. The uniform list of services to be followed in SEZ was the subject matter of Instruction No.79, issued 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.
While this is so, the Specified Officer of MEPZ-Chennai had unilaterally proceeded to remove General Insurance services from the purview of the default list of input services.
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.
Conclusion
The court in light of the specific stipulation in Instruction No.79 that 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.
The court stayed the operation of the Instruction until further orders and listed the matter on 30.08.2024
Case Details
Citation: W.P.No.22132 of 2024
Court: Madras High Court
Judge: Justice Anita Sumanth
Decision Date: 01/08/2024