Madras High Court Stays Instruction Issued By Specified Officer Of MEPZ Chennai Denying GST Benefits On Group Health Insurance Services

Madras High Court Stays Instruction Issued By Specified Officer Of MEPZ Chennai Denying GST Benefits On Group Health Insurance Services

In a significant development, the Madras High Court has stayed the operation of Instruction No.1/2024 (SO-MEPZ) dated 02 July 2024, issued by the Specified Officer of MEPZ-Chennai. The Instruction sought to exclude Group Health Insurance Service received by SEZ Units from the default list of services for authorised operations under the Special Economic Zone Act and Rules.

The Instruction was challenged on the ground that the action of the Specified Officer contradicts the Instruction 79 issued by the Department of Commerce (SEZ Section), Ministry of Commerce and Industry, dated 19 November 2013, which provides for a list of default services, including General Insurance Business, for the SEZs that are deemed to be towards their authorized operations. The list, which continues to be in effect under the GST regime, specifically allows the Development Commissioners and the Unit Approval Committees to expand, but not curtail, the list of services.

Observing that the SO Instruction was prima facie contrary to the Central Government’s Instruction No. 79, the Madras High Court ordered a stay on the operation of the Instruction No. 1/2024 (SO-MEPZ).

Lakshmikumaran & Sridharan Attorneys, Advocates Raghavan Ramabadran, Krithika Jaganathan, Kiran Manokaran, and Nirupama Shankar, represented the petitioner, Zoho Corporation Private Limited, in the petition.