TP Difference invoice from Old STPI Unit or Current SEZ Unit

[Sudhir M]

ABC Ltd provides services to foreign entity and has TP agreement with foreign holding entity- as per TP they are doing retrospective adjustment in TP Agreement due to which they have to recover differential margin of 74 Cr covering FY 2017-18 to FY 2021-22 from the holding company. During 17-18 to 21-22 ABC ltd was an STPI unit (Deboned Now) but now ABC Ltd in SEZ Unit. ABC has separate active GST Registration for STPI unit as well as SEZ Unit.

Query:

1. For the markup difference pertaining to the STPI unit period, should ABC raise export invoices from the SEZ or STPI unit?
2. If invoicing from the STPI unit, then how to comply with Softex, MPR, and APR requirements? Note: ABC has debonded its old office, but GST registration remains active.
3. If invoicing from the SEZ unit, how do we manage compliance for differential revenue not related to the SEZ unit?

AI Summary

ABC Ltd Faces Transfer Pricing Adjustment for 74 Crore; Must Navigate SEZ and STPI Compliance for Invoice Issuance ABC Ltd, which provides services to a foreign entity, is addressing a transfer pricing (TP) agreement adjustment requiring recovery of a 74 crore differential margin from its holding company for FY 2017-18 to FY 2021-22. During this period, ABC was an STPI unit but is now an SEZ unit with separate GST registrations for both. The query involves whether to raise export invoices from the STPI or SEZ unit and how to manage compliance. The response suggests complying with SEZ provisions if the STPI unit is closed or merged, and keeping relevant authorities informed to avoid future issues.