Supply to SEZ unit WITH PAYMENT OF TAX

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....upply to SEZ unit WITH PAYMENT OF TAX<br>Query (Issue) Started By: - SRINVASAN TR Dated:- 21-8-2026 Goods and Services Tax - GST Got 0 Replies <br> GST<br>Query – Supply to SEZ with Payment of IGST I have a query regarding zero-rated supply to an SEZ Unit/Developer with payment of IGST. Suppose a supplier makes a supply to an SEZ Unit for authorised operations: * Value of supply: Rs.10,00,000 ....

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....* IGST @ 18%: Rs.1,80,000 * Total invoice value: Rs.11,80,000 My understanding is that, under the payment-of-IGST route, the supplier charges Rs.1,80,000 IGST on the invoice. Therefore, the SEZ recipient would pay Rs.11,80,000 to the supplier, including the IGST component. This raises the following question: If the SEZ recipient actually pays the IGST amount of Rs.1,80,000 to the supplier, does t....

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....his not effectively create a tax/cash-flow burden on the SEZ Unit? Further, if the supplier subsequently deposits the Rs.1,80,000 IGST with the Government and then claims a refund of the IGST paid, would this not appear to provide a dual benefit to the supplier: * IGST of Rs.1,80,000 is collected from the SEZ recipient; and * The same Rs.1,80,000 is subsequently refunded to the supplier by the G....

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....overnment. In that case, how does the zero-rating mechanism ensure that the SEZ recipient is not ultimately bearing the tax burden? Is there any mechanism under GST/SEZ law whereby the SEZ recipient recovers or neutralises the IGST paid to the supplier? Or is the payment-of-IGST route intended to operate differently from the normal understanding of tax incidence? I would appreciate an explanation ....

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....of the economic/legal incidence of IGST in this specific transaction, preferably with a numerical example and reference to the relevant provisions/rules.<br>***<br> Discussion Forum - Knowledge Sharing ....