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,

AI Summary

Reverse Charge Mechanism not applicable to SEZ services under IGST if LUT is filed, per TRU letter. A discussion on the applicability of Reverse Charge Mechanism (RCM) under the IGST Act for services provided to Special Economic Zones (SEZ) was initiated. The query focused on whether services provided by an advocate to an SEZ would be subject to RCM or if SEZs receive a relaxation under Section 16 when a Letter of Undertaking (LUT) is filed. A response clarified that SEZs are not liable under RCM if they have an LUT, referencing a TRU letter from December 18, 2017. Participants requested the document for further clarification.