SEZ sale to EOU unit

[rajan gopal]

Dear Sir,

A SEZ unit executed BLUT (Bond cum LUT) with Development Commissioner. Now this unit has to sale goods to an EOU.So could clarify the below :-

1. Is this sale treated as DTA sale or export ?

2. IGST is applicable or not ?

Your quick reply will help us.

Thank you

Rajan

[KASTURI SETHI]

1. Sale from SEZ unit to EOU is deemed import. Section 53 of the SEZ Act, 2005 provides that the Special Economic Zone shall be deemed outside the Customs territory of India for the purpose of undertaking the authorized operations.Hence, the goods cleared from SEZ to DTA, is deemed import to India and is exigible to Customs duty under Customs Tariff Act, 1975, which includes IGST. Section 3(7) of the said Act placed below :-

Section 3(7) of Customs Tariff Act provides that “any article which is imported into India shall, in addition, be liable to Integrated Tax at such rate, not exceeding forty per cent. as is leviable under Section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8).

[rajan gopal]

Sir

Thank you for your clarification

[KASTURI SETHI]

Additional information linked to your reply

EOU is like any other supplier under GST and all the provisions of the GST Acts will apply. The benefit of Basic Customs Duty exemption on imports is available to EOU.

[Raghunandhaanan rvi]

Sir,

Supply from SEZ to DTA is termed as " Sales in DTA"

Buyer in DTA or SEZ unit on behalf of DTA shall file bill of entry with SEZ Customs

Customs duty/ Restrictions/ conditions as applicable to notmal import will apply

Thanks

AI Summary

SEZ to EOU Sale Deemed Import Under Section 53 of SEZ Act; IGST and Customs Duties Apply A query was raised regarding the sale of goods from a Special Economic Zone (SEZ) unit to an Export Oriented Unit (EOU), questioning whether it should be treated as a Domestic Tariff Area (DTA) sale or export, and if Integrated Goods and Services Tax (IGST) is applicable. Responses clarified that such a sale is deemed an import under Section 53 of the SEZ Act, 2005, and is subject to customs duty, including IGST, as per the Customs Tariff Act, 1975. Additional insights noted that EOUs are treated like any GST supplier, with applicable customs duty exemptions.