Supply from one FTWZ to another FTWZ

[Kaustubh Karandikar]

XYZ importing goods and storing in FTWZ. From this FTWZ, goods are supplied by XYZ to PQR, Delhi (Buyer) but Ship To: ABC(FTWZ) without payment of GST i.e. goods are physically moving from one FTWZ to another FTWZ 1) Can XYZ supply the goods without payment of GST though the buyer is non FTWZ? If yes, in the GSTR – 1 Return, it is to be shown as supplied to SEZ with ABC’s name or supplied to PQR? In the GSTR – 1 if it is shown as supplied to PQR and if in the drop-down menu, SEZ category is selected, the portal is not accepting since PQR is not SEZ. How to go about this?

[Shilpi Jain]

XYZ is supplying to PQR (non-SEZ) and shipping to SEZ. So supply is to a non-SEZ. So it will not be a zero rated supply. However, being a SEZ to DTA supply, PQR will have to file a bill of entry. So XYZ will not have to disclose in GSTR-1 as per the instructions of GSTR-1

AI Summary

Supply to non SEZ treated as non zero rated; shipping to FTWZ doesn't confer zero rating and buyer must file bill of entry. Supply invoiced to a domestic (non SEZ) buyer but physically shipped between FTWZs remains a supply to the non SEZ buyer and is not zero rated. The domestic buyer must file a bill of entry for SEZ to DTA movement. The supplier should report the transaction in GSTR 1 as made to the contractual non SEZ recipient in accordance with return instructions, rather than as an SEZ supply based solely on shipping to an FTWZ consignee.