SEZ - DTA- Exports Clarification

[Rajni D]

Dear Sir or Ma’am,

We are a business house in New Delhi and want to get material made on job work basis in an SEZ in Mangalore. Alternatively, we want to BUY material from SEZ in Mangalore for exports. We don’t want to pay customs duty or IGST. What is the procedure for buying material from an SEZ unit for exports without payment of IGST or Customs Duty when we are buying or getting the product manufactured for Exports. We request for clarification and your assistance. There are two scenarios:

1: Can the SEZ Manufacturer do a BILL TO SHIP TO Transaction for Exports where the BILL TO party is in India and the SHIP to party is outside India?

2. What is the procedure for Job Work done by an SEZ unit for exports by the DTA Customer.

3. Are there any statutory requirements and which is the best course forward.

Thank You!

[KASTURI SETHI]

Replied against Issue ID No.113514

AI Summary

SEZ supply rules: bill-to-ship-to and job-work pathways for duty and tax exemption in exports transactions
Clarification sought on mechanisms to procure goods or obtain job-work services from a Special Economic Zone (SEZ) for export without incurring customs duty or IGST, focusing on (a) permissibility and mechanics of a bill-to ship-to arrangement where invoicing is to a domestic buyer but goods are exported to a foreign consignee, and (b) procedures and statutory requirements for DTA customers to engage SEZ units for job-work intended for export.