Sales to SEZ

[CLARENCE PEREIRA]

We have an order for supply to a unit in SEZ. They are claiming that Central Excise is not applicable. I remember reading that in the Budget proposals of 28.02.2015 this exemption has been removed and only for physical exports out of India is Central Excise Duty NIL. Please clarify

AI Summary

Clarification: Supplies to SEZs remain exempt from Central Excise Duty despite changes; Rule 18 rebate claims removed. A query was raised regarding the applicability of Central Excise Duty on supplies to a Special Economic Zone (SEZ), referencing a budget proposal from February 28, 2015, which suggested the removal of certain exemptions. Respondents clarified that while rebate claims under Rule 18 were removed, supplies to SEZ can still be made without Central Excise Duty under ARE-1. Alternatively, goods can be cleared without duty under a Letter of Undertaking (LUT) or with duty payment and subsequent rebate claims, as per relevant rules and circulars.