GST - RCM on Inward supplies by unit regd in sEZ

[Madhavan iyengar]

In respect of inward supplies received by GST regd unit located in SEZ please clarify on following

a) is the unit required to pay GST on RCM basis in respect of supplies received from Advocate/ GTA etc

b) is the unit required to pay GST on RCM basis in respect of supplies received from unregd persons during the period 1st July 17 to 13th OCt 2017

Kindly share views and position in law

[KASTURI SETHI]

(a) SEZ unit will pay GST and claim refund.

(b) Supply of service to SEZ is to be treated as inter-State supply. During the period 1.7.17 to 13.10.17, supplier of service to SEZ was required to be registered compulsorily.

[Guest]

Ans for (a): yes, the SEZ unit have to pay GST under RCM. Refer faq 41 in page 484 of faqs released by cbic on 3rd dec,2018

Ans for (b): As sales to SEZ are treated as inter state supplies, the supplier have to get himself registered and hence there is no concept of procurement from unregistered person in this case. Refer to faq 54 in page 492

[chandra shaker]

GST on RCM basis in respect of supplies received from unregd persons during the period 1st July 17 to 13th OCt 2017

Yes, any registered dealer either regular or composition dealer must pay GST on inward supplies liable for tax at applicable rates ,accordingly paid GST on inward supplies shall be claimed as input tax credit in the relevant month ,return due to file..

AI Summary

Reverse charge mechanism: SEZ units must pay GST on specified inward supplies and may claim input tax credit. SEZ units must pay GST under the reverse charge mechanism on inward supplies (e.g., advocate, GTA services) and may claim the tax paid as input tax credit or refund. Supplies to SEZ units are treated as inter state supplies; suppliers were required to be registered during the initial GST implementation period, removing the concept of procurement from unregistered suppliers for those transactions.