DTA to DTA To SEZ Supply

[SUDHIRKUMAR SHAH]

One of my client is supplying steel in SEZ. He is purchasing from from Manufacturer for further supply to SEZ. In this case is it possible to purchase without payment of GST ?

[Ganeshan Kalyani]

In my view, you can avail the benefit of Notification no. 41/2017- IGST on merchant exporter.

[ASHOK PATRA]

Whether such sale will be subject to Customs duty as applicable in case of DTA sales from SEZ?

[Shilpi Jain]

This purchase cannot be made by the DTA without payment of tax.

Also this would not be covered under the merchant export notification and will not be eligible for the reduced rate of GST.

You can any way take credit of GST charged by vendor and apply for refund in case you cannot utilise it

[Shilpi Jain]

Supply to SEZ will not be liable to customs duty

[KALLESHAMURTHY MURTHY K.N.]

Dear Sir, 

Purchase from a DTA is a different transaction whether intended to sell to a SEZ sector, Export supply, or otherwise. The manufacturer cannot supply goods without collecting applicable taxes. The Purchaser can avail ITC or get the refund of such tax paid if supplies effected under zero rated taxes. DTA cannot purchase without payment of tax on purchases.

This is my personal opinion.

AI Summary

GST liability on DTA purchases: purchaser must pay tax at procurement but may claim input tax credit or refund.
A DTA purchaser supplying goods to an SEZ must pay applicable GST at procurement; the manufacturer must charge tax. Supplies to SEZ are zero-rated and not subject to customs duty, but the DTA buyer cannot procure tax-free. The buyer may claim input tax credit for GST paid or apply for refund of unutilised credit; merchant exporter relief under Notification No. 41/2017-IGST was not considered applicable to permit tax-free purchase in this scenario.