Drawback benefits for DTA supplies to SEZ units

[Swagath S]

Dear Sir,

Rule 24 of SEZ Rules provides for drawback benefits to supplies by DTA unit to SEZ units.

Further, Rule 30 of SEZ Rules, provides for procedures for supplies from DTA unit to SEZ unit which also prescribes that the payment for such supply shall be received from foreign currency account.

As per the above, can drawback be claimed even though the payment from the SEZ unit is received in INR. ?

Whether it can be argued that requirement of payment in foreign currency is procedural in nature and is condonable.??

Thank you

Regards

Swagath S

[YAGAY andSUN]

No it is not a procedural in nature but it is a statutorily mandatory requirement to get the remittance in foreign currency if goods are being supplied from DTA to SEZ for seeking export benefits and incentives.

AI Summary

Remittance in foreign currency required to claim drawback on DTA-to-SEZ supplies; INR payments are not sufficient. Rule 24 permits drawback for DTA supplies to SEZ units and Rule 30 requires payment into a foreign currency account; the foreign currency remittance requirement is a statutorily mandatory condition for claiming export benefits on such supplies and is not a procedural defect that can be condoned when payment is made in INR.