RCM Applicability on SEZ

[Ashiesh Prremji]

Dear Experts,

Clarity required under provisions of IGST Act regarding RCM application on SEZ-

Under Section 7 (5), any supply to or by SEZ shall be Inter- state supply.

Section 5 (3) specifies recipient liability to pay gst on supply of certain category of services / goods instead of Supplier as he is the person liable to pay tax in relation to such supply.

Section 16 specifically cover any supply to SEZ comes under Zero- rated supply and with LUT filing non- sez can supply to SEZ without payment of IGST.

As per Notification 10/2017 IGST, whole of the IGST payable under section 5 shall be paid under Reverse Charge.

So, my query is if any Advocate provide service to SEZ with Invoice without payment as 'Supply meant for Export under LUT without Payment for Authorised Operation' , will SEZ get relaxation as given under section 16 or gst under RCM will payable in context of section 5 ?

Thanks,

[Shilpi Jain]

SEZ will not be liable under RCM provided the SEZ has an LuT. This is also clarified in the TRU letter dated 18.12.2017.

[Ashiesh Prremji]

Thanks for Reply Shilpi Ma'am !

Could you attach that referred TRU letter.....I am not able to find it.

[Shilpi Jain]

It is a document. I am not able to copy its contents.Pls share mail id so i can forward

[Madhavan iyengar]

madam

can u share the relevant document of TRU F.No.334/335/2017-TRU dated December 18, 2017, email id [email protected] thanks

AI Summary

Reverse charge mechanism: SEZ not liable to pay GST where supplier exports services under LUT as zero-rated supply. Supply to an SEZ is treated as a zero rated inter state supply and, when the supplier exports services under a Letter of Undertaking (LUT) for authorised operations, the supplier may do so without payment of IGST; a TRU clarification dated December 18, 2017, states that the SEZ will not be liable to pay GST under the reverse charge mechanism where the supplier has exported under LUT and the LUT conditions are met.