Query on GST to Foreign entity at Free Trade Warehosing Zone (SEZ)

[Thiruppathi K]

Dear Sir,

We are located in Sriperumbudur Free Trade Warehousing Zone as a SEZ Unit. One of the Singapore company is our account holder at our SEZ. We are providing them Warehousing services, Transportation and other services pertaining to warehousing activity, for that we have to raise Service charges Bill. Now we have a query that is GST is applicable to our Singapore client for providing Services to them at Free Trade Zone.(Note: as per SEZ Act, FTWZ is a foreign teritory).

please clarify our point.

Thanks,

Thiruppathi.K

9500181516

[ANITA BHADRA]

Sec 7 (5) of IGST Act inter-alia provides that supply of goods to or by a Special Economic Zone unit or Developer is treated as supply of goods or services in the course of inter-state trade and there by attracts levy of IGST in terms of Sec 5 (1) of IGST Act.

[DR.MARIAPPAN GOVINDARAJAN]

IGST is applicable.

[Ganeshan Kalyani]

Letter of Undertaking can be applied for the exemption from payment of IGST.

[Nash Industries I Pvt Ltd]

Export of services - no GST is applicable.

Regards

S.Ramaswamy

AI Summary

IGST applicability: services by an SEZ unit in an FTWZ may be treated as inter state supplies or as export of services with LUT exemption.
Whether GST/IGST applies to services provided by an SEZ unit in a Free Trade Warehousing Zone to a foreign entity is contested: one view treats supplies to or by an SEZ unit as inter state supplies under Sec 7(5) of the IGST Act thereby attracting IGST; an alternative view treats the services as export of services not subject to GST. A Letter of Undertaking is identified as a compliance mechanism to obtain exemption from IGST payment where applicable.