SEZ Unit - Bond/LUT under GST

[Janesh Singh]

We are a Recruitment Firm, having a client in SEZ, Pune. We placed an employee who is working in Pune office of that client. Client is demanding Bond/LUT to release the payment. We cant furnish LUT as not an exporter and turnover under 30Lacs. How to furnish a bond and value. Moreover is there any other way as we are not willing to work with SEZ unit because of this issue. Kindly help. Thanks!

[KASTURI SETHI]

How have you supplied manpower without contract ? Contract between both is required. Non-issue of bond or LUT goes against you.

[Kishan Barai]

Bond & LUT has to be furnished by the exporter, not the supplier of goods & services to exporter.

[Kishan Barai]

More over when you supply the goods or service to SEZ, you become an exporter, so you need to furnish that as you will provide them bill without charging GST to them.

As you income is under 30 Lacks, facilities of LUT would not be provided to you. You can opt for Bond + BG method to carry on business with them.

[KASTURI SETHI]

Sh.Kishan Barai Ji, Both of your replies are 100 % correct. Querist is chained with SEZ. SEZ can ensure its security. It is upto them how they feel secure. Querist is basking in the grace of SEZ unit. So he will have to comply with conditions of SEZ. Manpower supplier requires certificate from SEZ for refund or exemption from GST. So naturally there should be agreement between both on the terms to be dictated by SEZ.

AI Summary

Export supply to SEZ requires Bond/LUT or bond with security and a contractual certificate to access GST relief. Supplying manpower to an SEZ is treated as an export of services under GST and to invoice tax-free the supplier must furnish either a Bond/LUT or a bond with bank guarantee where LUT eligibility is absent; a contractual agreement and any certificate from the SEZ are necessary to process refunds or exemptions and to satisfy the SEZ's security and documentation conditions.