Services to FTWZ

[Kaustubh Karandikar]

XYZ is providing management consultancy services to Free Trade Warehousing Zone (FTWZ). Whether it will be treated as export of service and if yes, whether XYZ is required to execute LUT for this transaction?

[Lav Prajapati]

Dear sir

Yes, XYZ is liable to execute LUT as per rule 96A ,

Any registered person availing the option to supply goods or services for export (i.e. outside India or SEZ Area)  without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest.

[KASTURI SETHI]

FTWZ stands merged with SEZ scheme. So supply of service to SEZ is export of service. LUT is required. Also go through MC & I(DC) SEZ Instruction No.86 dated 18.5.14.

[Kaustubh Karandikar]

Thanks all the experts for your kind guidance.

[Shilpi Jain]

It will be in the nature of supply to SEZ. It is not an export of service but only a zero-rated supply. Can be done under LUT.

AI Summary

Management Consultancy to SEZ: Is It Export? Rule 96A Requires LUT for Compliance with GST Regulations XYZ is providing management consultancy services to a Free Trade Warehousing Zone (FTWZ), which is considered part of the Special Economic Zone (SEZ) scheme. The primary query is whether this service qualifies as an export and if XYZ needs to execute a Letter of Undertaking (LUT). Responses indicate that services to SEZ are treated as exports, requiring an LUT under Rule 96A. However, one response suggests it is a zero-rated supply rather than an export, but still necessitates an LUT. The discussion emphasizes compliance with GST regulations for such transactions.