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Supply to SEZ

SANDEEP TIWARI (Student CA Final ) (85 Points)

27 May 2019

Is it necessary to supply within SEZ area to a SEZ unit any goods/service to be termed as zero rated supply?

As in my case renting of business centre is being provided outside the SEZ area but within the same state to a SEZ unit?

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5 Replies

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 27 May 2019

I think there is a case law for this where it was ruled it will be treated as zero rated supply

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SANDEEP TIWARI (Student CA Final ) (85 Points)
Replied 27 May 2019

Even if it is provided outside the SEZ area to A SEZ unit?

my query is that to qualify as zero rated supply, is it necessary to supply service within SEZ area demarcated for that Or it can also be provided outside SEZ area and be treated as zero rated supply?

CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 27 May 2019

Yes they can be treated as zero rated supply

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Nandini H Gupta (Chartered Accountant ) (369 Points)
Replied 27 May 2019

Refer to circular 48/22/2018-GST for the clarification in this reg:

1. Whether services of short-term accommodation, conferencing, banqueting etc. provided to a Special Economic Zone (SEZ) developer or a SEZ unit should be treated as an inter- State supply (under section 7(5)(b) of the IGST Act, 2017) or an intra-State
supply (under section 12(3)(c) of the IGST Act, 2017)?

Ans: In the instant case, section 7(5)(b) of the IGST Act is a specific provision relating to supplies of goods or services or both made to a SEZ developer or a SEZ unit, which states that such supplies shall be treated as inter-State supplies.

2. Whether the benefit of zero rated supply can be allowed to all procurements by a SEZ developer or a SEZ unit such as event management services, hotel and accommodation services, consumables etc?

Ans: subject to the provisions of section 17(5) of the CGST Act, if event management services, hotel, accommodation services, consumables etc. are received by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the specified officer of the Zone, the benefit of zero rated supply shall be available in such cases to the supplier.

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