Context & Relevant Notifications :
- Inserted vide s. 123(b) of the Finance Act, 2021 dated 28th March, 2021 for
Sec 16(4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify–
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid.
- NOTIFICATION No. 02/2023 – Integrated Tax appoints the 1st day of October, 2023, as the date on which the provisions of the said Act,
- There are no Notifications issued till date for Supplies to SEZ permitting users to make supply with payment, hence all supplies made hitherto wef from 1st Oct 2023 has to be WITHOUT payment of tax.
- Impact : Refund on Credit of Capital Goods ITC could not be claimed
Following procedure should be followed for SEZ Supplies w.e.f 01.10.2023:
- Supplier has to take LUT (Letter of Undertaking) from the GST portal, it’s a process to be done once every year.
- Take SEZ Letter of authorisation (LoA) copy from the customer.
- Declaration from the SEZ unit buyer stating that Goods or services being purchased/availed is for authorized Operation in SEZ unit as permitted in LoA.
- Ensure goods or services being supplied to SEZ unit are mentioned in the approved list of goods and services for Authorised Operation of the SEZ unit issued by the Development Commissioner of the SEZ (to which the customer belongs).
- Following declaration has to be mentioned in Invoice issued for SEZ supply along with LUT ARN number:
“SUPPLY MEANT FOR SUPPLY TO SEZ UNIT / DEVELOPER FOR AUTHORISED OPERATIONS UNDER LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”
- After supply has been made, obtain DTA endorsement copy generated from SEZ online portal or certificate from AO/SO of SEZ unit certifying that Goods/services have been admitted into SEZ unit and intended to be used for Authorised operations.
In case, any of the above condition is not fulfilled then we will have to charge IGST in the invoice irrespective of Inter-state or intra-state supply.
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