GST to taxpayer registered under SEZ
This query is : Resolved
10 February 2023
GST taxpayer registered in Karnataka needs to issues tax invoice to taxpayer registered in karnataka but in SEZ.
whether to charge CGST-SGST or IGST on bill ?
whether to charge CGST-SGST or IGST on bill ?
10 February 2023
IGST.
Supplies into SEZ are exempt from GST and are considered as exports. Therefore, the suppliers supplying goods to SEZs can either supply under bond or LUT without payment of IGST and claim credit of ITC; or supply on payment of IGST and claim refund of taxes paid.
Supplies into SEZ are exempt from GST and are considered as exports. Therefore, the suppliers supplying goods to SEZs can either supply under bond or LUT without payment of IGST and claim credit of ITC; or supply on payment of IGST and claim refund of taxes paid.
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10 February 2023
Supply to SEZ are treated as zero-rated supplies equivalent to exports. If you are paying GST on supply to SEZ then you will charge IGST and claim refund of the same.
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19 February 2023
What if Canteen service is provided to vendors registered in SEZ, also Canteen service provider is operating in SEZ zone.
What if he is operating outside SEZ?
Can Canteen service provider raise invoice without charging GST stating Supply to SEZ under LUT bond in both of the above scenario?
What if he is operating outside SEZ?
Can Canteen service provider raise invoice without charging GST stating Supply to SEZ under LUT bond in both of the above scenario?
27 July 2024
Here’s a detailed breakdown for GST billing and compliance related to SEZ (Special Economic Zone) operations:
### **1. GST Billing for a Taxpayer Registered in Karnataka but in SEZ**
**Scenario:**
- **Supplier**: Registered in Karnataka
- **Recipient**: Registered in Karnataka but operating in SEZ
**GST Treatment:**
- **Intra-State Supply within Karnataka**: Normally, if both the supplier and recipient are located in the same state (Karnataka), GST would be charged as **CGST** and **SGST** for intra-state supplies.
- **SEZ Consideration**: However, supplies to SEZ units are treated as **zero-rated supply** under GST.
**Invoice Requirements:**
- For a supply to an SEZ unit, even if both parties are located in the same state, the supply is treated as **zero-rated**. Therefore, you should issue an invoice without charging any GST, indicating that the supply is made to an SEZ unit under **LUT (Letter of Undertaking)** or **Bond**.
**Required Documentation:**
- You must mention on the invoice that the supply is under **LUT** or **Bond** and the recipient's SEZ unit details.
### **2. Canteen Service Provided to Vendors Registered in SEZ**
**Scenario 1: Canteen Service Provider Operating within SEZ**
- **Provider**: Operating within SEZ
- **Recipient**: Vendors registered in SEZ
**GST Treatment:**
- Services provided within SEZ to SEZ units are considered as **zero-rated supply**.
- **Invoice**: The canteen service provider can issue an invoice without charging GST, indicating that the service is provided to SEZ units under **LUT** or **Bond**.
**Scenario 2: Canteen Service Provider Operating Outside SEZ**
- **Provider**: Operating outside SEZ
- **Recipient**: Vendors registered in SEZ
**GST Treatment:**
- Services provided to SEZ units from outside the SEZ are treated as **zero-rated supply**.
- **Invoice**: Similar to the first scenario, the service provider should issue an invoice without charging GST, mentioning that it is a supply to an SEZ unit under **LUT** or **Bond**.
**Required Documentation:**
- Ensure that the invoice specifies that it is a zero-rated supply under **LUT** or **Bond**.
- Maintain proof of the supply being to an SEZ unit, and ensure compliance with SEZ regulations.
### **Summary**
1. **Tax Invoice for Supply to SEZ**:
- **Within Karnataka**: Issue a zero-rated invoice under **LUT** or **Bond** without CGST/SGST/IGST.
- **Operating in SEZ**: Similarly, issue a zero-rated invoice without GST, under **LUT** or **Bond**.
2. **Canteen Service**:
- **Operating within SEZ**: Issue a zero-rated invoice without GST, indicating the service is provided to SEZ under **LUT** or **Bond**.
- **Operating outside SEZ**: Issue a zero-rated invoice without GST, indicating the service is provided to SEZ under **LUT** or **Bond**.
Ensure you maintain all necessary documentation and records as required for compliance with SEZ regulations and GST provisions.
### **1. GST Billing for a Taxpayer Registered in Karnataka but in SEZ**
**Scenario:**
- **Supplier**: Registered in Karnataka
- **Recipient**: Registered in Karnataka but operating in SEZ
**GST Treatment:**
- **Intra-State Supply within Karnataka**: Normally, if both the supplier and recipient are located in the same state (Karnataka), GST would be charged as **CGST** and **SGST** for intra-state supplies.
- **SEZ Consideration**: However, supplies to SEZ units are treated as **zero-rated supply** under GST.
**Invoice Requirements:**
- For a supply to an SEZ unit, even if both parties are located in the same state, the supply is treated as **zero-rated**. Therefore, you should issue an invoice without charging any GST, indicating that the supply is made to an SEZ unit under **LUT (Letter of Undertaking)** or **Bond**.
**Required Documentation:**
- You must mention on the invoice that the supply is under **LUT** or **Bond** and the recipient's SEZ unit details.
### **2. Canteen Service Provided to Vendors Registered in SEZ**
**Scenario 1: Canteen Service Provider Operating within SEZ**
- **Provider**: Operating within SEZ
- **Recipient**: Vendors registered in SEZ
**GST Treatment:**
- Services provided within SEZ to SEZ units are considered as **zero-rated supply**.
- **Invoice**: The canteen service provider can issue an invoice without charging GST, indicating that the service is provided to SEZ units under **LUT** or **Bond**.
**Scenario 2: Canteen Service Provider Operating Outside SEZ**
- **Provider**: Operating outside SEZ
- **Recipient**: Vendors registered in SEZ
**GST Treatment:**
- Services provided to SEZ units from outside the SEZ are treated as **zero-rated supply**.
- **Invoice**: Similar to the first scenario, the service provider should issue an invoice without charging GST, mentioning that it is a supply to an SEZ unit under **LUT** or **Bond**.
**Required Documentation:**
- Ensure that the invoice specifies that it is a zero-rated supply under **LUT** or **Bond**.
- Maintain proof of the supply being to an SEZ unit, and ensure compliance with SEZ regulations.
### **Summary**
1. **Tax Invoice for Supply to SEZ**:
- **Within Karnataka**: Issue a zero-rated invoice under **LUT** or **Bond** without CGST/SGST/IGST.
- **Operating in SEZ**: Similarly, issue a zero-rated invoice without GST, under **LUT** or **Bond**.
2. **Canteen Service**:
- **Operating within SEZ**: Issue a zero-rated invoice without GST, indicating the service is provided to SEZ under **LUT** or **Bond**.
- **Operating outside SEZ**: Issue a zero-rated invoice without GST, indicating the service is provided to SEZ under **LUT** or **Bond**.
Ensure you maintain all necessary documentation and records as required for compliance with SEZ regulations and GST provisions.
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