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Whether all supplies to SEZ Unit/ Developer are zero rated supply?

Goods and Services Tax - GST - By: - Bimal jain - Dated:- 4-7-2018 - Supplies to SEZ unit/ Developer are Zero-rated Supply: In terms of Section 16 of the IGST Act, 2017, the following supplies of goods or services are considered as zero-rated supply. (Relevant provision of Section 16 is reproduced here in below): 16. (1) zero rated supply means any of the following supplies of goods or services or both, namely:- export of goods or services or both; or supply of goods or services or both to a Spe .....

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subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilized input tax credit; or he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act, 2017 or the rules made thereu .....

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the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. Contrary Judgment by the Advance Ruling: Recently an advance ruling was given by Karnataka bench of Advance ruling authority ( the AR ) in the case of M/s GOGTE INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED; KAR ADRG 02/2018 dated March 21, 2018, pertaining to the following question: Whethe .....

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the SEZ and also independent of SEZ; the billing is done on SEZ company for employees of SEZ; while they have not entered into any contract with either SEZ or any unit in the SEZ; and they are not giving any concessional rate to the billings of SEZ at present; that SEZ units contended for concession; that SEZ units gave letter to the hotel to provide billing in their name whenever any of their guest / employee uses the services/ facilities and hence they filed the instant application. Held by AR .....

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on 16(1)(b) of IGST Act‟ 2017. Rule 46 of CGST Rules 2017 stipulates that the invoice shall carry an endorsement Supply meant for export / Supply to SEZ unit or SEZ Developer for authorized operations on payment of Integrated Tax or Supply meant for Export / Supply to SEZ unit or SEZ Developer for authorized operations under Bond or Letter of Undertaking without payment of Integrated Tax as the case may be. It is clearly evident that the supplies of goods or services or both towards the au .....

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Goods and Services Tax Act, 2017. In the instant case, admittedly, the applicant is located outside the SEZ. Therefore, the services rendered by the applicant are neither the part of authorized operations nor consumed inside the SEZ. Since place of provision of services in case of Hotel has been prescribed under the Act 'location of the Hotel' the rendition of services of restaurant, short term accommodation and Banqueting/conferencing cannot be said to have been 'imported or procur .....

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ed supplies. As per the second proviso to Rule 89(1) of the CGST Rules 2017, the application for refund shall be filed by : (a) supplier of goods after such goods have been admitted in full in the SEZ for authorized operations, as endorsed by the specified officer of the Zone; (b) supplier of services along with such evidences regarding receipt of services for authorized operations as endorsed by the specified officer of the Zone. A conjoint reading of the stated provisions reveals that supplies .....

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