S ELAVARASI (ACCOUNTANT) (2975 Points)
27 April 2018Dear Sir / Madam,
ABC Ltd supply to XYZ (SEZ) under GST....
Here.,
Who is given LUT bond...?
How to prepare LUT....?
Read more at: https://www.caclubindia.com/forum/supply-sez-with-lut-459755.asp?offset=1
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
ABC will furnish LUT.
Procedure for furnishing LUT-->
Login to GST portal-> User Services->Furnish Letter of Undertaking(LUT)->Select FY and attach scan copy of any previous LUT-> Follow the detailed procedure therof
S ELAVARASI
(ACCOUNTANT)
(2975 Points)
Replied 27 April 2018
We don't have any LUT in PYs.
So, What Can I do...?
Already we supplied material to SEZ in FY 2017-18. Without LUT but not charging GST. Also wrongly understanding about LUT It's from buyer's end..?
Please advice and guide me...
Pankaj Rawat
(GST Practitioner)
(55047 Points)
Replied 27 April 2018
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
1) No issues, create a new LUT for this F.Y. by logging in...its easy to create a new LUT.(For details see Rule96A)
2) I think Charge GST to SEZ supplier by issuing debit note and discharge the tax amount along with interest ,afterwards claim refund as per section 54.Confirm this statement from someone as I am not sure.
Pankaj Rawat
(GST Practitioner)
(55047 Points)
Replied 27 April 2018
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
U said u r not charging any GST !
Pankaj Rawat
(GST Practitioner)
(55047 Points)
Replied 27 April 2018
NO , SIR IAM NOT SAYING THAT U R NOT CHARGING GST, ..I SAID THAT THE SEZ UNIT MAKE A PAYMENT OF ANY BILL IS BY DEDUCTING THE GST AMOUNT , TEHY DO NOT GIVE THE PAYMENT FOR GST AMOUNT
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
SEZ will not make payment to you. IGST mentioned on invoice is only for presentation purpose. Read the below mentioned article carefully:-
There are three options available with supplier to SEZ
1) Supply with payment of IGST
2) Supply under a Bond
3) Supply under a Letter of Undertaking
1-SUPPLY WITH PAYMENT OF IGST
Under this option person making supply to SEZ will charge IGST at applicable rate as may be applicable for supplies of Goods or Services made to SEZ or SEZ Developer. Invoice will be Export Invoice in Indian Currency with a declaration that ‘SUPPLY MEANT FOR SEZ DEVELPOER/UNIT WITH PAYMENT OF INTEGRATED TAX’. This option will be beneficial for faster processing of Refund. Actually the IGST liability shown in the Invoice is only for the presentation purpose and should not be collected from the customer, actually it works as follow.
For e.g. Mr. ABC Ltd makes supplies of Goods costing Rs.100000 for Rs.1500000 which attracts IGST @ 18% to Mr. XYZ Ltd being located in Kandla SEZ. Invoice will be as under
Value of Supply: Rs.150000.00
IGST @ 18% : Rs. 27000.00
Total Invoice Value : 177000.00
Now, ABC Ltd, will first discharge liability of IGST of Rs.27000 by utilizing Input Credit of Rs.18000 (Rs.100000*18%) and Cash Payment of Rs.9000.00, thereafter, he will get refund of Rs.27000 whole amount of IGST, So Cash Payment of Rs.9000- Refund of Rs.27000 i.e. he get refund of Input Credit of Rs.18000 in net terms.
Journal Entries to be passed will be as follow.
| 1) For Purchase
Purchase A/c Dr. 1000000 SGST Credit A/c Dr. 9000 CGST Credit A/c Dr. 9000 To Party A/c 118000
|
2) For Sale to SEZ
XYZ Ltd. A/c Dr. 150000 IGST Refund Receivable A/c Dr. 27000 To Sales 150000 To IGST Liability A/c 27000 |
| 3) For Payment of IGST
IGST Liability A/c Dr. 27000 To SGST Credit A/c 9000 To CGST Credit A/c 9000 To Bank A/c 9000 |
4) On Receipt of Refund
Bank A/c Dr. 27000 To IGST Refund Receivable A/c 27000 |
S ELAVARASI
(ACCOUNTANT)
(2975 Points)
Replied 27 April 2018
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
SEZ made the payment of Rs 100000 only? or it considered the amount inclusive of IGST and deducted such amount and paid the balance?
S ELAVARASI
(ACCOUNTANT)
(2975 Points)
Replied 27 April 2018
Yes Sir...
We are Supplied 5 invoices to Customer (He is SEZ). Total value of the 5 invoice Rs. 385000.
We are not charge any GST in that bills. The Customer paid all the Payment without any deduction...
Ex :
Basic Value - Rs. 385000
CGST @ 9% to SEZ 0% - Rs. 0.00
SGST @ 9% to SEZ 0% - Rs. 0.00
TOTAL = - Rs. 385000
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
Now the thing is clear to me, just amend the invoice and charge IGST on the invoice.
SEZ party will not pay IGST to you but will pay the basic amount.( In our case they have already made the payment).
But you were supposed to pay this IGST to Govt. and then claim the refund as per section 54.
Since you have not paid, you are requested to pay the amount to Govt. along with interest and claim refund of tax portion only.
Hope your doubt stands clear. Compare this answer with the article I have sent.
S ELAVARASI
(ACCOUNTANT)
(2975 Points)
Replied 27 April 2018
Thank You Sir...
We are not have any LUT in PY and CY... Also we will supply tomorrow some materials to the Same Party.
So,
What can I do now..?
Please guide this regards. It's very helpful...
Also the above said replies i'll change the Invoices (FY 17-18) or not...?
CA Shivam Arora
(Chartered Accountant)
(2414 Points)
Replied 27 April 2018
Charge IGST on such supplies and write 'SUPPLY MEANT FOR SEZ DEVELPOER/UNIT WITH PAYMENT OF INTEGRATED TAX' on the invoice.
Note:- Patry will not pay the IGST amount but you will pay to the Govt. and claim refund afterwards.
Yes change the invoice after consulting the party.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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