26 July 2024
When dealing with sales of goods under Special Economic Zones (SEZs) and projects that are eligible for exemptions under Notifications such as 108/95, the process and registration requirements under GST are different from the pre-GST regime. Here’s a comprehensive guide on handling such transactions under GST:
### **1. Goods Sale under SEZ & 108/95 under GST**
**a. Sales to SEZ Units**
1. **GST Treatment**: - **Zero-Rated Supply**: Supplies made to SEZ units or developers are treated as zero-rated under GST. This means that the supply is subject to GST at 0%, and the supplier can claim a refund of the input tax credit (ITC) or adjust it against other GST liabilities. - **Documentation**: You need to file a LUT (Letter of Undertaking) for making zero-rated supplies without payment of tax. This replaces the old system where excise duty was exempted under specific notifications.
2. **Registration Requirements**: - **Existing GST Registration**: Your existing GST registration will continue. There is no need for fresh registration specifically for SEZ transactions if you are already registered under GST. - **Filing LUT**: You must file an LUT (Form GST RFD-11) online to make zero-rated supplies. Ensure that you have an LUT approved to make such supplies without payment of GST.
3. **GST Returns**: - **GSTR-1**: Report zero-rated supplies in your GSTR-1 return. - **GSTR-3B**: Reflect the zero-rated supplies in your GSTR-3B return and claim a refund of the ITC or adjust it as per the regulations.
**b. Sales under Notification 108/95**
1. **Old Excise Notifications**: - **Transition to GST**: Notifications like 108/95 were relevant in the excise duty regime. Under GST, the concept of excise duty for goods has been replaced by GST, and the old notifications are no longer applicable. - **Impact on GST**: The sale of goods under projects that were previously exempt under Notification 108/95 should now be handled as per GST provisions. Generally, project-specific exemptions or benefits should be checked under GST laws.
2. **GST Implications**: - **Project Sale under GST**: If your sales were previously exempt under notifications like 108/95, you would need to review GST provisions applicable to your sector or project. The project-specific benefits or exemptions may be available under other GST provisions or special schemes.
### **2. Practical Steps**
1. **Ensure Compliance with GST**: - **File LUT**: Ensure that you have filed LUT-1 and it has been approved. This allows you to make zero-rated supplies to SEZ units. - **GST Returns**: Accurately report zero-rated supplies in your GST returns and claim refunds or adjustments of ITC as applicable.
2. **Consult GST Provisions**: - **Review Notifications**: Check for any specific GST notifications or circulars that replace or adapt previous exemptions and notifications under GST. - **Seek Expert Advice**: For project-specific or complex scenarios, consult with a GST expert or tax advisor to ensure compliance with all applicable GST laws.
### **Summary**
- **SEZ Sales**: Sales to SEZ units are zero-rated under GST. Use the existing GST registration and file LUT-1 for making zero-rated supplies. - **Notification 108/95**: Old excise notifications like 108/95 are no longer applicable under GST. Review the GST provisions for project-specific exemptions or benefits. - **Filing and Compliance**: Continue using your existing GST registration and file returns as required, ensuring compliance with the zero-rated supply provisions.
For accurate application of GST rules and handling specific cases, consulting with a GST expert or tax advisor is recommended.
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