Tax to be charged on deemed export supplies within same state

[Yatin Bhopi]

Dear expert

We have deemed export customers in state and out of states. Please share related section\text in act \ rules \ Notification regarding charging of IGST or CGST+SGST in case of supplies within same state.

[Ganeshan Kalyani]

Refer Notification 40/2012-central tax (rate) in this regard.

[Ganeshan Kalyani]

Sorry, notification 40/2017-CT (Rate).

[Yatin Bhopi]

Dear Sir

If I am not mistaken this exemption notification is for suppling goods to merchant exporter and not for deemed export such as EOU's & under Advance authorisation scheme

[Rajagopalan Ranganathan]

Sir,

Section 16 (1) of IGST Act states that “zero rated supply” means any of the following supplies of goods or services or both, namely:––

(a) export of goods or services or both; or

(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

Therefore supplies made to EOU units are not zero rated supply and they are liable to gst at normal rate. Therefore if the supply is made to EOU units within the same state CGST and SGST are payable. If the supply is made to EOU unit in another State you have to pay IGST.

[Yatin Bhopi]

Dear Sir,

I am fully agreed with you. But this confustion arosed when I tried to upload invoice on GST portal. When I select invoice type as a deemed export for supply made to EOU within same state, its automatilcy select supply type as a inter state and not allow to charge CGST & SGST only IGST allow to be charge.

[Ganeshan Kalyani]

Invoice type need to be selected in accordance with the supply within State as a regular outward supplies .

[Nash Industries I Pvt Ltd]

the notification defining the supplies as deemed export and revising the table 6A of the return issued only in Oct. We have to wait for the changes in the GST Portal.

Regards

S.Ramaswamy

[Guest]

Dear Yatin,

Deemed exports (Supply of goods to a Special Economic Zone developer or Special Economic Zone unit) even in case of supplies within the same state is treated as Inter-State supplies and IGST is to be charged, not CGST + SGST. Kindly refer Section 8(1)(i) of the IGST Act. In case you are making supplies against a bond or an LUT then you can make the supply as Zero rated, without charging any GST (Refer Section 16(3) (a) and (b) of the IGST Act).

Hope the above helps.

[Yatin Bhopi]

There is no any doubt about SEZ supplies. Query is related to deemed export (supplies to EOU & against Advance Authorisation) within same state.

[Guest]

Seems I had misunderstood your question. I do not believe supplies to EOUs are treated as deemed exports. Deemed exports seem to only be related to SEZs. You have to deal with EOUs as if dealing with a domestic company and pay GST accordingly. Please refer http://dgftcom.nic.in/exim/2000/DGFT-GST-FAQ.pdf and links embedded within for further clarifications. Maybe it would help.

AI Summary

Debate on GST Taxation: Deemed Export Supplies to EOUs Within State Should Incur CGST and SGST, Not IGST. A discussion on a forum addresses the tax implications of deemed export supplies within the same state under the Goods and Services Tax (GST) framework. Participants debate whether Integrated GST (IGST) or Central GST plus State GST (CGST+SGST) should be charged for supplies to Export Oriented Units (EOUs) within the same state. One participant clarifies that supplies to EOUs are not zero-rated and should incur CGST and SGST, while others highlight confusion arising from the GST portal's handling of such invoices. The discussion also touches on the distinction between deemed exports and supplies to Special Economic Zones (SEZs).