DTA supplied goods at SEZ - Order receive in US $

[SNEHAL SHAH]

Dear sir,

We are the manufacturing of Chemical products and export to various countries .

We will be receiving one order for supply at SEZ unit in US $ .

Can we supply our chemical product to SEZ and receive an amount in foreign currency .

Kindly suggest in this matter .

Regards,

SNE

[KASTURI SETHI]

Sir,

Answer is Yes.

[CSSANJAY MALHOTRA]

Dear Snehal,

YES, As SEZ is considered as foreign land.

Physical exports in respect to supply to foreign countries are eligible for Duty drawback and similarly supplies to SEZ also qualified for Duty drawback if the payment receives in foreign currency.

[CSSANJAY MALHOTRA]

Dear Snehal,

Yes, SEZ is considered as foreign land and there is no retsriction in realising Free Foreign Exchange.

Furthermore, Physical exports in respect to supply to foreign countries are eligible for Duty drawback and similarly supplies to SEZ also qualifies for Duty drawback if the payment is received in foreign currency.

[YAGAY andSUN]

Please check Rule 30 of the SEZ Rules and adherence with the compliance mentioned in it. You would also need to file Bill of Export for getting the Duty Drawback.

[Kishan Barai]

SEZ,

Not only foreign currency, you can also realize the amount in INR as well, still it would be considered as exports & you will get all incentives like DBK.

Thank You

[Kishan Barai]

Oh, I am sorry. You can not get DBK if you supply in INR to SEZ

Actually,

Industry body Assocham has urged the Centre to extend drawback benefits in Special Economic Zones (SEZs) against payment in rupees for encouraging units to procure from domestic suppliers and ensure that they are able to maintain export competitiveness.

Thank You

[CSSANJAY MALHOTRA]

Dear Kishan ji,

My submission would be to rely on Notifications, Circulars instead of News which is 4 years old....This suggestion is as you are one of expert members in this forum, where querist rely on submissions.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

Yes, Sir. Rightly advised. Anyone who commits mistake on this public forum whether knowingly or unknowingly his reputation is dented (including me.) So one has to be very very careful and alert before posting opinion on this forum. Incorrect reply brings discredit to TMI also. When the die is cast, no possibility of making up the loss.

[Kishan Barai]

First of all I would like to tell sorry to entire TMI members & experts, actually I made a mistake but corrected it before anyone could find.

Sorry to all once again.

I do provide answers based on latest notification, circular, government publication, etc. But as a human I made a mistake.

Cordially Yours,

Kishan Barai

[KASTURI SETHI]

Sh.Krishan Barai Ji,

Sir, I agreed with you in toto. Nobody is perfect. Despite utmost care, we are prone to commit mistakes. So pl. close the chapter. When we rectify our mistake, the concept becomes clear to the querist. Confusions stand removed in the querist's mind.

'Disclaimer Certificate' on this forum serves as a shield for experts, not as luxury. I think so. Whatever I feel I share with all in positive and humble way, rather, I would call in sportsman spirit.

I hope that you agree with me.

[Kishan Barai]

Yes Sir.

AI Summary

SEZ Transactions in Foreign Currency Allow Duty Drawbacks, Not Applicable if Payment in INR; Official Sources Crucial A manufacturing company inquired about supplying chemical products to a Special Economic Zone (SEZ) and receiving payment in US dollars. Respondents confirmed that SEZs are treated as foreign territories, allowing transactions in foreign currency and eligibility for duty drawbacks. However, if payments are made in Indian Rupees (INR), duty drawbacks are not applicable. The discussion emphasized the importance of relying on official notifications and circulars for accurate information. One participant apologized for initially providing incorrect information and highlighted the need for careful and accurate responses on public forums to maintain credibility.