This will be done by revoking a finance ministry notification issued on March 3 that provided for refund of service tax on services consumed within the boundaries of the SEZ or outside in domestic tariff area (DTA), the report added.

Services tax directorate under the Central Board of Excise and Customs (CBEC) would issue a fresh notification shortly.

This will provide a lot of relief to those paying service tax within and outside SEZs. Currently, units and developers had to claim refunds after having paid service tax. Earlier, developers and units were exempted from service tax on services availed within an SEZ, but they had to pay the tax on services from DTA. "The notification made service tax available as refund for both, which has created a lot of confusion. Hence, it will be revoked soon once the new government takes charge of the respective ministries," quoted a senior commerce ministry official in the report.

The official also added that the new notification would seek to reinstate the benefit of exemption from paying service tax to developers and units while it will be available as a refund for services rendered from DTA to SEZs such as banking, port and courier services.

"The notification needs to be reviewed immediately and exemption from the tax should be restored as it was before March 31 and the same should be done subsequently for services consumed from DTA to SEZs," said L B Singhal, director general, Export Promotion Council for EOUs and SEZs (EPCES).