Export from DTA Unit to SEZ Unit with same I.E.C.

[Ritesh Dave]

Dear All,

We have one Unit in the DTA area and another Unit in SEZ area with same name and with same I.E.C. DTA unit produce raw materials which used in finished products of SEZ Unit. Finished products is exported from SEZ Unit. DTA unit obtained the Advance Authorization for the import of raw materials of finished goods of DTA unit and exports the same against the SEZ unit.

Can supplies of DTA unit is considered as exports if both the company name is same and having same I.E.C. ?

Kindly reply.

Regards,

Ritesh Dave

[KASTURI SETHI]

In my view, yes.

[Atul Rathod]

Yes, as there is no restriction in SEZ Act. SEZ A

[Atul Rathod]

Yes. I understand that there is no such restriction in SEZ Act. SEZ act simply says that procurement from DTA act would be import and the same would be called as export from DTA Side.

[Shilpi Jain]

This query is in the light of the fulfillment of export obligation w.r.t. the advance authorisation.

As per para 4.05 of FTP AA would be issued for

(i) Physical export (including export to SEZ);

Further as per para 4.21 of FTP

(iii) Export to SEZ Units shall be taken into account for discharge of export obligation provided payment is realised from Foreign Currency Account of the SEZ unit.

So realisation from foreign currency account of SEZ is necessary to be considered for fulfillment of EO.

[Atul Rathod]

Query is related to -will the supplies by DTA unit to SEZ unit having same name ( other business vertical/branch) & IEC code would still be considered as fullfillment of export obligation under AA for DTA.

[YAGAY andSUN]

In our view no as sale to self is no sales. It is a settled legal position.

AI Summary

Export recognition for DTA-to-SEZ transfers may depend on foreign currency realisation and transactional identity. Supplies from a DTA unit to a same named SEZ unit sharing the same IEC may be treated as exports because SEZ procurement is import for the SEZ and export for the DTA; however, Advance Authorization export obligation will be recognised only if payment is realised in the SEZ unit's foreign currency account, while an opposing view denies export credit for sales to the same entity.