Procedure for supply of manpower @ sez
This query is : Resolved
12 August 2017
Dear Team,
We are supplying Manpower to leading company and their office located in SEZ and we have not charged GST on billing value since zero rated for SEZ however for our records should we keep any documents which is to be certified by GST officials or can we approach the client to get the certificate for any future reference.
Kindly send the details on above subject.
We are supplying Manpower to leading company and their office located in SEZ and we have not charged GST on billing value since zero rated for SEZ however for our records should we keep any documents which is to be certified by GST officials or can we approach the client to get the certificate for any future reference.
Kindly send the details on above subject.
10 August 2024
When supplying manpower to a company located in a Special Economic Zone (SEZ), the supply of services is generally considered a zero-rated supply under the Goods and Services Tax (GST) law. However, proper documentation and compliance are essential to ensure that the zero-rated treatment is valid and can be substantiated in case of scrutiny.
Here’s a detailed procedure and the documentation required for the supply of manpower services to an SEZ:
### **Procedure for Supply of Manpower to SEZ**
**1. ** **Determine GST Applicability:**
- Ensure that the supply of manpower services qualifies as a zero-rated supply under GST. As per Section 16 of the Integrated Goods and Services Tax (IGST) Act, 2017, services supplied to an SEZ unit or developer are zero-rated.
**2. ** **Document the Supply:**
- **Supply Agreement:** Maintain a copy of the service agreement or contract between your company and the SEZ unit. This should detail the nature of services provided and terms of engagement.
- **Invoice:** Issue a tax invoice mentioning that the supply is a zero-rated supply. Ensure that the invoice includes the relevant details such as the GSTIN of the SEZ unit, description of services, and a reference to zero-rated supply.
**3. ** **Obtain and Maintain Relevant Documentation:**
- **Letter from SEZ Unit:** Request a letter from the SEZ unit confirming that they are located within the SEZ and that the services are provided to them.
- **SEZ Registration Certificate:** Keep a copy of the SEZ registration certificate of the client for your records.
- **Proof of Delivery:** Maintain records of delivery or service completion, such as service reports or job completion certificates, if applicable.
**4. ** **Certificate for Zero-Rated Supply:**
- **GST Official Certification:** While there is no formal requirement for GST certification for zero-rated supplies, it is prudent to request a confirmation from the SEZ unit regarding the zero-rated nature of the supply.
- **Certificate from Client:** Ask the SEZ client for a certificate confirming that the services provided are for their SEZ operations and are eligible for zero-rating.
**5. ** **Documentation for Future Reference:**
- **Maintain Records:** Keep all the documentation, including contracts, invoices, SEZ certificates, and correspondence with the SEZ unit, for future reference and in case of any audit.
- **Prepare for Audit:** Ensure that all documentation is readily available in case of a GST audit. The documents should be organized and easily accessible.
**6. ** **Compliance and Filing:**
- **GST Returns:** Ensure that you correctly report the zero-rated supply in your GST returns (GSTR-1) and claim a refund or input tax credit on any input services or goods used to provide the manpower services.
- **Refund Claim:** If applicable, file a refund claim for the input tax credit under Rule 89 of the CGST Rules, 2017, if you are eligible to claim a refund.
### **Summary:**
- **Zero-Rated Supply:** The supply of manpower to SEZ units is zero-rated.
- **Documentation:** Keep all necessary documents, including agreements, invoices, SEZ registration, and proof of service.
- **Client Certification:** Obtain a certificate from the SEZ unit confirming their SEZ status and the nature of the supply.
- **Record Keeping:** Maintain comprehensive records for future reference and compliance.
Following these steps will help ensure that your zero-rated supply to SEZ units is properly documented and compliant with GST regulations.
Here’s a detailed procedure and the documentation required for the supply of manpower services to an SEZ:
### **Procedure for Supply of Manpower to SEZ**
**1. ** **Determine GST Applicability:**
- Ensure that the supply of manpower services qualifies as a zero-rated supply under GST. As per Section 16 of the Integrated Goods and Services Tax (IGST) Act, 2017, services supplied to an SEZ unit or developer are zero-rated.
**2. ** **Document the Supply:**
- **Supply Agreement:** Maintain a copy of the service agreement or contract between your company and the SEZ unit. This should detail the nature of services provided and terms of engagement.
- **Invoice:** Issue a tax invoice mentioning that the supply is a zero-rated supply. Ensure that the invoice includes the relevant details such as the GSTIN of the SEZ unit, description of services, and a reference to zero-rated supply.
**3. ** **Obtain and Maintain Relevant Documentation:**
- **Letter from SEZ Unit:** Request a letter from the SEZ unit confirming that they are located within the SEZ and that the services are provided to them.
- **SEZ Registration Certificate:** Keep a copy of the SEZ registration certificate of the client for your records.
- **Proof of Delivery:** Maintain records of delivery or service completion, such as service reports or job completion certificates, if applicable.
**4. ** **Certificate for Zero-Rated Supply:**
- **GST Official Certification:** While there is no formal requirement for GST certification for zero-rated supplies, it is prudent to request a confirmation from the SEZ unit regarding the zero-rated nature of the supply.
- **Certificate from Client:** Ask the SEZ client for a certificate confirming that the services provided are for their SEZ operations and are eligible for zero-rating.
**5. ** **Documentation for Future Reference:**
- **Maintain Records:** Keep all the documentation, including contracts, invoices, SEZ certificates, and correspondence with the SEZ unit, for future reference and in case of any audit.
- **Prepare for Audit:** Ensure that all documentation is readily available in case of a GST audit. The documents should be organized and easily accessible.
**6. ** **Compliance and Filing:**
- **GST Returns:** Ensure that you correctly report the zero-rated supply in your GST returns (GSTR-1) and claim a refund or input tax credit on any input services or goods used to provide the manpower services.
- **Refund Claim:** If applicable, file a refund claim for the input tax credit under Rule 89 of the CGST Rules, 2017, if you are eligible to claim a refund.
### **Summary:**
- **Zero-Rated Supply:** The supply of manpower to SEZ units is zero-rated.
- **Documentation:** Keep all necessary documents, including agreements, invoices, SEZ registration, and proof of service.
- **Client Certification:** Obtain a certificate from the SEZ unit confirming their SEZ status and the nature of the supply.
- **Record Keeping:** Maintain comprehensive records for future reference and compliance.
Following these steps will help ensure that your zero-rated supply to SEZ units is properly documented and compliant with GST regulations.
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