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

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.