Services supplied to SEZ

[Kaustubh Karandikar]

XYZ supplying services to SEZ for transportation of goods by Sea for Export. In relation to this, XYZ procures services from Shipping Line and shipping line charging Ocean Freight (without GST) and other charges (with GST). XYZ in turn recovering these charges from SEZ and charging Ocean Freight with mark - up (without GST) and other charges (with GST). Can XYZ claim exemption from GST for other charges also being services supplied to SEZ? If yes is XYZ required to procure LUT? In my view, XYZ can claim the exemption being supplied to SEZ subject to getting LUT. Views of the experts please.

AI Summary

Zero-rated supply to SEZs allows invoices without GST under LUT, with input tax refund subject to authorized operation use.
Supply of services to a Special Economic Zone for export by sea is zero-rated, permitting supply without payment of GST if the supplier furnishes a Letter of Undertaking (LUT). Zero-rating (distinct from exemption) allows the supplier to claim refund or utilize corresponding input tax credits. Amendments limit zero-rating to supplies used for authorized SEZ operations; supplies not used for authorized operations will not qualify as zero-rated.