Supplies to SEZs are zero-rated under GST, exempting them from taxes and treating them as exports.
Being in a Special Economic Zone (SEZ) offers tax advantages, as supplies to SEZ developers or units are considered zero-rated under GST, effectively exempting them from GST and treating them as exports. Suppliers can either provide goods under bond or Letter of Undertaking (LUT) without paying Integrated GST (IGST) and claim Input Tax Credit (ITC), or supply with IGST payment and claim a refund. Supplies to or from SEZs to the Domestic Tariff Area (DTA) are subject to customs duties as per the Customs Tariff Act, 1975, in line with Section 30 of the SEZ Act, 2005.