To Issue Invoice in USD for Material supply to FTWZ

[NISHANT SHAH]

Dear All,

Our client got order from Maharashtra party for supply of goods to their FTWZ Unit(Free Trade Warehousing Zone) at Panvel. Now its customer at Maharashtra want invoice to be raised in USD. Can our client make invoice in USD?

If so, 1) please provide notification or circular relevant to it.

2) what condition need to be fulfilled by client before dispatch of material at FTWZ?

3) can our client make supply under LUT (zero-rated)?

Please reply with relevant notification of gst.

[Shilpi Jain]

please provide notification or circular relevant to it.

There is no restriction on issuing invoice in US.however for disclosure in returns you will need to convert the amount I to rupees. So gst invoice will have to be in INR.

2) what condition need to be fulfilled by client before dispatch of material at FTWZ?

FTWZ is an SEZ unit. Pls refer SEZ Act.

3) can our client make supply under LUT (zero-rated)?

Yes.

[NISHANT SHAH]

Thanks Mam

[YAGAY andSUN]

The Special Economic Zones Act, 2005 and the Special Economic Zones Rules, 2006 are the legal framework for FTWZ. Instructions are also issued by the Ministry of Commerce & Industries from time to time to clarify various operational aspects of FTWZ. Export entitlement is available for supply of goods from Domestic Tariff Area (DTA) to FTWZ for authorised operations. The Unit or Developer can claim drawback or Duty Entitlement Pass Book in respect of goods procured from DTA. Alternatively, the same can be claimed by the DTA supplier on the basis of a disclaimer from the Unit or Developer.

[YAGAY andSUN]

https://www.flandersinvestmentandtrade.com/export/sites/trade/files/attachments/FTWZ%20Benefits_0.pdf

AI Summary

Invoicing currency flexibility with GST reporting obligations: FTWZ supplies may be invoiced in foreign currency but GST must be reported in INR. Supplies from a DTA party to an FTWZ unit may be invoiced in foreign currency, but GST reporting requires conversion to Indian rupees and GST invoices must be reflected in INR. FTWZ units fall under the SEZ framework and authorised supplies attract export entitlements. Suppliers should comply with FTWZ/SEZ operational requirements. Such supplies can be zero-rated under an LUT where eligible, and drawback or duty entitlement benefits may be claimed by the FTWZ unit or by the DTA supplier on disclaimer.