Procedure for Supply to SEZ

[Paramjeet singh]

Procedure for Supply to SEZ

[Guest]

Supply to SEZ is treated as export outside India. Therefore you need to follow the normal procedure of export like preparation of ARE-3, filing of Bonds / UT if applicable or just on Invoice as the case may be as prescribed.

[Guest]

Dear Sir, Section 26 (c) of SEZ Act provides that the goods brought to a Special Economic Zone or an SEZ unit from Domestic Tariff Area (DTA) for carrying out authorized operations by the developer or SEZ unit, shall be exempt from payment of Central Excise duty leviable under Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force. Section 53(1) of the SEZ Act, 2005 treats the territory of SEZ outside the Customs territory of India on deemed basis. Further section 2(m)(ii) of the SEZ Act provides that supplying goods from DTA to a unit or developer shall have the status of export. Section 26(d) of SEZ Act, seeks to extend drawback or other benefits in case of supplies from DTA to SEZ. Thus supplies from DTA to SEZ are considered as exports. Before operationalisation of the SEZ Act, supplies from DTA manufacturers to an SEZ units were exempted from payment of Central Excise Duty in terms of Central Excise notification No. 58/2003-CE dated 22.07.2003 and procedure as specified in the SEZ Rules and SEZ Regulation issued under Chapter X A of the Customs Act was applicable. The goods were required to be cleared from the DTA unit under the cover of ARE 1 in the same manner as in case of physical exports but with the modification that the removal on the cover of ARE1 was prescribed to be against the domestic procurement certificate issued or bill of export assessed by zone customs. However, there was no exemption in case of goods supplied to SEZ developers. Regards Pradeep Khatri [email protected]

[Prabhakar Vennalaganti]

AS the same can't be eloborated hear, requested to contact for highlighting the procedural and compliance part.

AI Summary

Supply to SEZ treated as export, so DTA supplies are exempt from central excise duty and follow export procedures. Supply of goods from the Domestic Tariff Area to a Special Economic Zone is treated as an export and qualifies for exemption from Central Excise duty; the SEZ statute deems SEZ territory outside customs territory and confers export status on such supplies. Export formalities and documentation must be followed, and where applicable bonds or undertakings or clearance on invoice are required under the procedures prescribed by SEZ and customs rules.