supply of goods to SEZ from domestic tariff area

[VENKAT S]

the goods described Tissue materials procured from supplier through Inter State with IGST from domestic tarrif area to SEZ units at different locations in and around chennai after obtaining LUT from GST. Now we have made refund of unutilised INPUT IGST through online. Now the officer at SEZ is refusing to grant approval stating that the tissue materials are not exempt from GST. The government has to issue clarifications on this since the supplies made to SEZ without GST are getting blocked with working capital of cash flow. TREAT THIS AS MOST IMPORTANT.

CA S VENKATA SUBRAHMANYAM

[KASTURI SETHI]

Can you give nomenclature of tissue materials along with Chapter/Heading/sub-heading ?

[MUKUND THAKKAR]

Your Query is not clear, Supply in to SEZ is ZERo rated and I think you considering as exempted. please clearify the details as ask by Kasturiji sir.

[VENKAT S]

1. Product Code - 1005 - HSN - 48182000 - Hard Roll Tissue - Toilet Hand towel

2. Product Code - 4001 - HSN - 48181000 - Bathroom Tissue - Toilet towel

3. Product Code - 30895 - HSN - 34013090 - Indian Foam - Hand Wash

4. Product Code - 1357 - HSN - 34029099 - Sanitizer - Hand Sanitizer

5. Product Code - 1033 - HSN - 48181000 - Facial Tissue - Table Facial Tissue

these are the products that are dealt and these are consumables in the units located in SEZ units.

[KASTURI SETHI]

I have examined Instruction of Default List and other circulars, case laws etc. I have found no restriction on the goods mentioned by you for authorised operations in SEZ unit. For sanction of refund claim, the claimant is not to wait for clarification to be issued. Refund claim is to be sanctioned as per instructions existed on the date of sanctioning refund claim. It is claimant's right to ask for the basis of rejection of refund claim. Anyhow, refund claim cannot be rejected without issuance of SCN.

AI Summary

Zero-rated supplies to SEZ: refund of unutilised input IGST must be sanctioned under existing instructions without awaiting clarification. Supplies from the domestic tariff area to SEZ units are treated as zero-rated; unutilised input IGST attributable to those zero-rated supplies is refundable. The taxpayer, having procured consumables for SEZ units and obtained LUT, filed an online refund which an SEZ officer refused to approve contending the goods were not exempt. Administrative instructions show no restriction on these goods for authorised SEZ operations, and refunds must be sanctioned under existing instructions without awaiting further clarification; rejection requires issuance of a show-cause notice and the claimant may seek the basis of rejection.