Clearance to SEZ Units or AA license

[Anish Goyal]

Sir,

We are a private bonded warehouse registered under MOOWR, 2019. We supply to SEZ units or against AA license which are deemed export under GST. Whether we are require to pay BCD and IGST on inputs contained in finished goods supplied to SEZ or against AA? or it will be treated as exports and no need for payment of BCD and IGST.

[Rajagopalan Ranganathan]

Sir,

Supplies made to SEZ unit or SEZ Developer is zero rated vide Section 16 (1) (b) of IGST Act, 2017.

In respect of deemed exports gst is to be paid by the supplier and the supplier can claim refund of such gst paid subject to the conditions mentioned in Notification No. 49/2017-Central Tax dated 18.10.2017.

[Anish Goyal]

I am not taking about the tax implication on outward Supplies. My query is that we are a private bonded warehouse registered under MOOWR, 2019. As we are registered under MOOWR,2019 we import raw materials without payment of BCD and IGST. Now, if we export the resultant product we are not required to pay BCD and IGST on import, however at the time of domestic clearance of resultant product we pay BCD and IGST on raw-materials. Now my question is whether on supply of resultant product to SEZ units or under AA are we required to pay BCD and IGST on raw-material imported?

[Rajagopalan Ranganathan]

Sir,

My reply to your query is BCD and IGST are not payable in your case.

[Anish Goyal]

Sir,

Request to provide legal backing.

[ASHOK PATRA]

I think Export has not been defined under MOOWR,2019 but defined under parent act i.e.Custom Act as per which physical exports will be considered as export whereas supply to SEZ/AA holder will not be considered as export.Hence BCD & IGST will be payable.

[KASTURI SETHI]

Supplies to SEZ and SEZ units are exports and NOT 'deemed exports'.

[KASTURI SETHI]

In continuation of my reply above, pl. go through the following :-

As per Section 2((m) of SEZ Act, 2005“export” means –

(i) taking goods, or providing services, out of India, from a Special Economic Zone, by land, sea or air or by any other mode, whether physical or otherwise; or

(ii) supplying goods, or providing services, from the Domestic Tariff Area to a Unit or Developer; or

(iii) supplying goods, or providing services, from one Unit to another Unit or Developer, in the same or different Special Economic Zone;

[YAGAY andSUN]

If you are registered under MOOWR, 2020 then no need to pay the duties and taxes while importing. On the event of sales to SEZ Unit, no tax is paid, provided you adherence with the prescribed compliances.

[Shilpi Jain]

Supply against AA would require payment of bcd n igst on imported material as it will be equivalent to domestic supply. Supply to sez will not require since it is a place outside India for the purposes of customs

[Raghunandhaanan rvi]

Sir,

Your supply to SEZ from your bonded warehouse is considered as "Export under Section 69 of Customs Act". Thus, no duty payable.

Whereas, your supply to Advance Authorization Holder, is termed as supply to DTA. Thus, GST payable

AI Summary

Zero-rated supply to SEZ: no basic customs duty or IGST on bonded imports, but Advance Authorization supplies attract duty and tax. Supplies from a private bonded warehouse to SEZ units are treated as zero-rated exports and are not subject to Basic Customs Duty or IGST when imported under MOOWR and supplied to SEZ, subject to compliance; supplies against an Advance Authorization are treated as domestic supplies and attract BCD and IGST, while deemed exports require GST payment by the supplier with possible refund under applicable notifications.