TaxTMI 
TaxTMI 
2026 (5) TMI 962
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....rastructure within the notified processing area of GIFT SEZ; that the applicant, in its capacity as a Co-Developer, is engaged in leasing out specified commercial premises ("the demised premises") situated wholly within the processing area of GIFT SEZ to the Lessee for the purpose of carrying out its authorized operations as approved under the SEZ framework through a lease arrangement which is duly documented through a registered lease deed executed between the applicant and the Lessee; that the demised premises form an integral part of the notified SEZ area, and both parties i.e. Lessor & Lessee are recognized entities under the SEZ framework; that the applicant holds a valid GST registration and the lessee, being a SEZ Unit, also holds a separate GST registration specifically for its operations in the GIFT SEZ; that the lessee's operations and premises are duly recognized by the Development Commissioner, GIFT SEZ as authorized operations; that the supply is treated as an inter-State supply u/s 7(5)(b) of IGST Act, 2017 and is, by its nature, intended to be a zero-rated supply u/s 16(1)(b) of IGST Act, being a supply of service to a SEZ Unit for its authorized operations; that w.e....
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...., Intra-SEZ supply treatment & Endorsement alternatives exposes the Applicant to significant GST liability, interest, and penalties if assessment authorities or refund processing authorities subsequently hold contradictory that supplies were not "for authorized operations"/Intra-SEZ supplies do not qualify for zero-rating due to absence of endorsement. This uncertainty directly impacts working capital and liquidity due to IGST implications, refund eligibility and assessment outcomes. 5. The applicant has asked for Advance Ruling on the following questions: Question 1: Documentary Requirements and Legal Interpretation of "For Authorized Operations" Whether for availing zero-rated supply treatment u/s 16 of IGST Act, 2017 read with Notification No. 09/2017-Integrated Tax (Rate) dated 28.06.2017, as amended w.e.f. 01.10.2023, for services supplied from Domestic Tariff Area (DTA) to Special Economic Zone (SEZ) units/developers, the phrase "for authorized operations" can be established through documentary evidence including Letter of Approval (LOA) / Eligibility Certificate issued by SEZ authorities demonstrating that the service relates to authorised operations; or....
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....Approval (LOA) / Eligibility Certificate issued by SEZ authorities demonstrating that the service relates to authorised operations; or whether endorsement from the Specified Officer of SEZ on each invoice is mandatorily required irrespective of other documentary evidence available (Letter of Approval (LOA) / Eligibility Certificate) to prove that the service is supplied for "authorized operations"? Applicant's submission: • The relevant extract of Section 16 of IGST Act, 2017 is reproduced as under: 16. (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 authorized operations to a Special Economic Zone developer or a Special Economic Zone unit. The relevant extract of Section 2 of SEZ Act, 2005 is reproduced as under: (C) "Authorized operations" means operations which may be authorised under sub-section (2) of section 4 and sub-section (9) of section 15; • The relevant extract of Section 15 of SEZ. Act,2005 is reproduced as under: (1) Any person, who intends to ....
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.... such authorization becomes statutory recognition under Section 15(9) of the SEZ Act. Therefore, where a supplier of goods or services makes supply to a SEZ Unit or developer whose LOA explicitly stipulates that it carries on authorized operations, the statutory condition of "for authorized operations" under Section 16(1)(b) of the IGST Act stands duly satisfied. Neither the SEZ Act nor the IGST Act mandates additional procedural endorsement by the Specified Officer when the LOA itself contains an explicit mention of the nature and scope of authorized operations. The endorsement mechanism is, at best, a procedural facilitation under Rule 89(1). • Accordingly, where the Development Commissioner has granted the LOA specifying that the unit is engaged in authorized operations, any supply made to such SEZ Unit for carrying out those operations shall be treated as a zero-rated supply u/s 16 of the IGST Act, 2017 even in the absence of a separate endorsement from the Specified Officer. Accordingly, following documentary evidence legally & substantively establishes "for authorized operations": 1. Letter of Approval (LOA): Formal Govt. document specifying authorized a....
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....a:- (1) The Domestic Tariff Area supplier supplying goods or services to a Unit or Developer shall clear the goods or services, as in the case of zero-rated supply as per provisions of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) either under bond or legal undertaking or under any other refund procedure permitted under Goods and Services Tax laws or Central Excise law, or as duty or tax paid goods under claim of rebate, on the cover of documents laid down under the relevant Central Excise law for the purpose of export by a manufacturer or supplier. ... ... ... ... ... ... ... ... ... .... .... .... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .... .... .... ... ... ... ... ... (4) A copy of the document referred to in sub-rule (1) or copy of Bill of Export, as the case may be, with an endorsement by the authorised officer that goods have been admitted in full into the Special Economic Zone shall be treated as proof of export and a copy with such endorsement shall also be forwarded by the Unit or Developer to the Goods and Services Tax or Central Excise Officer having jurisdiction over the Domestic Tariff A....
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....sactions between SEZ units. The primary obligation cast on the SEZ unit is the proper utilization of goods and services for authorized operations, for which the unit remains liable. • Rule 30, as well, is structured to address procedure for procurement from DTA, mainly contemplating supplies under a zero-rated mechanism as per Section 16 of the IGST Act. Its sub-rule (4) mandates an endorsement by the authorized officer only in the context of DTA procurements, specifically as proof of export for DTA suppliers' tax purposes. This limited and targeted endorsement requirement is thus statutorily restricted to transactions involving DTA-to-SEZ movement and does not extend to inter-SEZ supplies. • Most pertinently, Rule 30(15), which governs procurement of goods and services from another SEZ unit (whether within the same SEZ or a different SEZ), sets forth a distinct compliance regime for such transfers. It prescribes the filing of a Bill of Entry for home consumption, assessment, and related logistics for inter-SEZ movement except within the same SEZ, where even these formalities are dispensed with. Crucially, throughout Rule 30, there is no stipulation for an....
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.... GST law should be interpreted harmoniously with SEZ regulatory framework. It should not be interpreted to create impossible or impractical compliance situations. In the present case, a unique & practical compliance situation exists where: • SEZ authorities are unable to provide endorsement for Intra-SEZ supplies DTA Service Procurement Form (DSPF) and that is not applicable for invoices for intra-SEZ transactions • No formal, written procedure has been established as a substitute • This creates an impossible situation where compliance cannot be achieved regardless of diligence. • When endorsement is inapplicable and no formal alternative procedure has been established by SEZ authorities, GST law should be interpreted to permit alternative documentary evidence. • Following comprehensive documentary package should be sufficient to prove "authorized operations": 1. Letter of Approval (LOA) of supplier & recipient specifying authorized operations 2. Invoice clearly marked with Recipient's SEZ unit name, GSTIN and a note that "Service supplied to SEZ Unit [Name] for authorized operations as per LOA [dat....
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....the processing area of GIFT SEZ to the Lessee for the purpose of carrying out its authorized operations as approved under the SEZ framework through a lease arrangement which is duly documented through a registered lease deed executed between the applicant and the Lessee; that the demised premises form an integral part of the notified SEZ area, and both parties i.e. Lessor & Lessee are recognized entities under the SEZ framework; that the applicant holds a valid GST registration and the lessee, being a SEZ Unit, also holds a separate GST registration specifically for its operations in the GIFT SEZ; that the lessee's operations and premises are duly recognized by the Development Commissioner, GIFT SEZ as authorized operations; that the supply is treated as an inter-State supply u/s 7(5)(b) of IGST Act, 2017 and is, by its nature, intended to be a zero-rated supply u/s 16(1)(b) of IGST Act, being a supply of service to a SEZ Unit for its authorized operations; that w.e.f. 01.10.2023, the framework for zero-rated supplies to SEZ underwent significant amendment and Section 16 of the IGST Act, 2017 was amended to restrict benefit of zero-rated supply exclusively to supplies made "for aut....
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....ervices, from one SEZ unit to another SEZ unit (both located within SEZ and not in DTA) qualifies as a zero-rated supply u/s 16 of IGST Act, 2017, and if yes, whether endorsement from the Specified Officer of SEZ is mandatory on each invoice for such intra-SEZ transactions, or whether the Letter of Approval (LOA) / Eligibility certificate establishing that both parties are SEZ units engaged in authorized operations would be sufficient as documentary evidence? Question 3: Practical Difficulty in Obtaining Endorsement for Intra-SEZ Supplies. In situations where the service provider & service recipient are both SEZ Developer / units, and the SEZ authorities deny to provide endorsement for such invoices mentioning that "a procedure for endorsement is for services supplied from DTA to SEZ and details of such invoice to be mentioned through DTA Service Procurement Form (DSPF) and that is not applicable for invoices for intra-SEZ transactions. Whether Letter of Approval (LOA) / Eligibility certificate as documentary evidence would be acceptable to establish that such services are supplied for authorized operations and such intra-SEZ supplies would still qualify for zero-....
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....f Area (DTA) to Special Economic Zone (SEZ) units/developers, the phrase "for authorized operations" can be established through documentary evidence including Letter of Approval (LOA) / Eligibility Certificate issued by SEZ authorities demonstrating that the service relates to authorised operations; or whether endorsement from the Specified Officer of SEZ on each invoice is mandatorily required irrespective of other documentary evidence available (Letter of Approval (LOA) / Eligibility Certificate) to prove that the service is supplied for "authorized operations"? 14.1 In, short, the question is about the documentary evidence/support that is required OR sufficient to prove that the services supplied from DTA to SEZ are for 'authorised operations' i.e. whether LOA/Eligibility certificate is enough OR whether endorsement from the Specified Officer on each invoice is mandatorily required irrespective of other documentary evidence available. Thus, the question asked is solely about the documentary evidence/support that is either already available with them/already obtained from SEZ authorities OR further documents / endorsements that are required to be obtained from the SEZ authorit....
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....gaged in authorized operations would be sufficient as documentary evidence?" 15.1 Thus, here also, we find that the question is about the documentary evidence/support that is required OR sufficient to prove that the intra-SEZ transactions is a zero-rated supply i.e. whether endorsement from the Specified Officer of SEZ is mandatory on each invoice for such intra-SEZ transactions, or whether the Letter of Approval (LOA) / Eligibility certificate establishing that both parties are SEZ units engaged in authorized operations will suffice. Thus, the question asked is solely about the documentary evidence/support that is either already available with them/already obtained from SEZ authorities OR further documents/endorsements that are required to be obtained from the SEZ authorities to prove/support that the intra-SEZ transactions is an 'authorised operation'. On going through the question and comparing the same vis-à-vis the clauses from Section 97(a) to 97(g) of the CGST Act, 2017, we find that the question does not, in any way, relate to: (a) classification of any goods or services (or both) OR (b) applicability of a notification issued under the provisions....
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....prove that such services are supplied for authorized operations and such intra-SEZ supplies would still qualify for zero-rated treatment under GST law. On going through the question and comparing the same vis-à-vis the clauses from Section 97(a) to 97(g) of the CGST Act, 2017, we find that the question does not, in any way, relate to: (a) classification of any goods or services (or both) OR (b) applicability of a notification issued under the provisions of this Act OR (c) determination of time and value of supply of goods or services or both OR (d) admissibility of input tax credit of tax paid or deemed to have been paid OR (e) determination of the liability to pay tax on any goods or services or both OR (f) whether applicant is required to be registered OR (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 16.2 We therefore find that the said question on Advance Ruling does not fall within the ambit of any of the sub-sections of Section 97 of the CGST Act, 2017 i.e....