Supply from sez to bonded warehouse

[RAKESH JAIN]

Sir, needs ur advise on the under Transaction Details:

1. Our SEZ unit has sold goods to a foreign buyer against payment in freely convertible foreign currency.

2. As per the foreign buyer’s instructions, the goods are to be delivered and stored in a bonded warehouse in India, which is duly notified under Section 60 of the Customs Act, 1962.

3. The foreign buyer retains ownership of the goods while they remain stored in the bonded warehouse.

4. Subsequently, the foreign buyer sells the goods to an indigenous buyer in India, with payment also received in freely convertible foreign currency.

5. The indigenous buyer will take delivery from the bonded warehouse after making the necessary customs duty and IGST payments for clearance.

Clarification Sought:

In view of the above transaction, we request clarification on whether the initial sale made by our SEZ unit to the foreign buyer should be classified as:

a) DTA Sale,

b) Deemed Export, or

c) Physical Export under SEZ and Customs regulations.

AI Summary

Deemed export: SEZ sale to foreign owner with goods held in bonded warehouse treated as deemed export for export accounting.
Sale by an SEZ unit of goods delivered to a notified bonded warehouse in India and retained in ownership by a foreign buyer, with subsequent onward domestic clearance after payment of duties and IGST, should be treated as Deemed Export rather than a DTA sale or a physical export because the goods do not leave India; relevant deemed-export provisions and central notifications govern recognition for export accounting and NFEE inclusion, subject to confirmation under the applicable CGST/SEZ/DGFT/customs instructions.