Supply to Sez

[Ashiesh Prremji]

Dear Sir,

As we all know u/s 16 of IGST Act, any supply made to SEZ will be Zero rated supply. In my scenario, if supplier issues IGST bill to SEZ & collect IGST from SEZ . Suppliers are showing in GSTR-1 as 'Supply to SEZ with GST" & making payment in their 3B. Accordingly SEZ is claiming that IGST as ITC.

My query is whether any issue can be raised by department again such ITC claimed by SEZ ? Is there any consent letter/documentation required to keep in record by SEZ from supplier that they are not entitled to claim refund on the same as IGST is paid by SEZ only ?

Kindly suggest....

AI Summary

Zero-rated supplies to SEZs permit claiming input tax credit when IGST is paid, with bond or LUT as alternatives.
Supplies to SEZ units are treated as zero-rated supplies under IGST and are inter state supplies; where suppliers charge and collect IGST, SEZ units may lawfully claim that IGST as input tax credit and set it off against domestic tax liabilities, provided statutory conditions for ITC and documentary compliance are fulfilled. Suppliers may alternatively supply under bond or a Letter of Undertaking instead of charging IGST.