2024 (4) TMI 844

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....nt has availed the service from Advocate Prajesh Shah towards execution of lease agreement for premise in GIFT City, Gandhinagar. The applicant is the fund manager of Abans Investment Trust. 4. Briefly, the facts leading to the applicant seeking a ruling is as under:- • in terms of sections 7(5) and 16 of the IGST Act, 2017, supply of services made to an SEZ unit for carrying out the authorised operation in an SEZ is considered as zero-rated supply; that supply to SEZ is considered as an inter-state supply; that when the same is used for authorized operations it will be zero-rated; • that CBIC Circular No 48/22/2018-GST dated 14.06.2018, clarifies treating of supplies to SEZ units as inter-state supplies; • that it is the policy of the Government to allow tax free procurement of goods and services in an SEZ; • that in terms of section 51 of the SEZ Act 2005, the provisions of SEZ Act would have overriding effect on provisions of any other legislation including taxation laws; • that rule 5(5)(a) of the SEZ Rules, 2006, provides exemption to SEZ from State Goods and Services Tax [SGST]: • that in terms o....

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....sed operation without payment of Integrated Tax provided the actual recipient i.e. SEZ unit, furnishes a LUT or bond as specified in condition (i) of para 1 of notification No. 37/2017-CT; that the appellant will not be required to pay any GST under RCM on the advocate services received, if applicant furnishes LUT; • that they wish to rely on the case of,- • GMR Aerospace Engineering Limited [2019 (8) TMI 748)]; • M/s Metlife Global Operations Support Center Private Limited [2020-VIL-560-CESTAT-Del-ST]; • M/s Portescap India Private Limited vide MAH/AAAR/DS-RM/15/2022-23 dated 13.01.2023 5. In view of the foregoing, the applicant is before us seeking a ruling on the below mentioned question viz 1. Whether an applicant which is a SEZ Unit is required to pay tax under reverse charge mechanism on services received from advocate by virtue of Notification No. 13/2017-Central Tax Rate (as amended time to time)? 2. If, answer to the above point is in the affirmative, then the tax under reverse charge mechanism is required to be paid under which tax head i.e., IGST or CGST and SGST? 6. Personal hearing in the matte....

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....be a supply of goods or services or both in the course of inter-State trade or commerce. o Section 16. Zero rated supply.- (1) "zero rated supply" means any of the following supplies of goods or services or both, namely: - (a) export of goods or services or both; or (b) supply of goods or services or both '[for authorised operations] to a Special Economic Zone developer or a Special Economic Zone unit. (2) ......................... ^2[(3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed: Provided that the registered person making zero rated supply of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Service....

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.... a place outside India by land, sea or air or by any other mode, whether physical or otherwise; or (ii) receiving goods, or services by a Unit or Developer from another Unit or Developer of the same Special Economic Zone or a different Special Economic Zone; o Section 7 .'Exemption from taxes, duties or cess. Any goods or services exported out of, or imported into, or procured from the Domestic Tariff Area by,- (i) a Unit in a Special Economic Zone; or (ii) a Developer, shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from the payment of taxes, duties or cess under all enactments specified in the First Schedule. o Section 51 : Act to have overriding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. • Special Economic Zones Rules, 2006 o Rule 5. Requirements for establishment of a Special Economic Zone. - (5) Before recommending any proposal for setting up o....

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....;s averment that a combined reading clearly shows that the 'reverse charge' notifications cannot have any application in this case. 11. The applicant has also raised an alternative plea that even assuming that RCM notification, is applicable then also they could exercise the option of supply of services under EUT etc. without payment of IGST as provided in respect of supplies made from DTA to an SEZ unit specifically u/s 16(3) of the IGST Act, 2017. 12. We find that the FAQs on GST, 3rd edition, dated 15.12.2018, on the question of payment of IGST under RCM, when received by an SEZ unit has clarified as under: Q 41. Whether SEZ unit or developer needs to pay IGST when it received supplies which are under reverse charge mechanism? Ans. All supplies to SEZs are zero rated. However, the suppliers are given two options. In this case, the supplier is not liable to pay GST as the supply is under reverse charge mechanism. The recipient is considered as deemed supplier. Therefore, SEZ has to pay GST in this case. 13. However, we also find that under notification No. 37/2017-CT, a unit in DTA can supply services to a unit in SEZ without payment of IGST sub....