Sales Tax under DTA sale by SEZ
This query is : Resolved
09 December 2010
Hi Member,
Is sales tax applicable on DTA sale by SEZ? can you please let me know is there any such instruction or any circular in this regards.
Is sales tax applicable on DTA sale by SEZ? can you please let me know is there any such instruction or any circular in this regards.
10 December 2010
Why circular is needed, when it is clear that sale in domestic area will be taxable.
Message likes :
2 times
23 July 2025
Regarding **Sales Tax on DTA Sale by SEZ Units**:
Under the Indian tax laws and SEZ (Special Economic Zone) regulations:
* **Sales made by an SEZ unit to the Domestic Tariff Area (DTA)** are considered as **taxable supplies** under the normal tax regime.
* SEZ units enjoy **exemption from state sales tax or VAT on sales made to SEZ units**, but **sales made by SEZ units to DTA customers are subject to sales tax/VAT** as applicable.
* Therefore, sales from SEZ to DTA attract **sales tax or VAT as per the local state law** where the DTA is located.
### Relevant points:
* There are **no exemptions or special provisions** that exempt SEZ units from paying sales tax on goods sold to DTA.
* SEZ units must register under VAT/sales tax for their DTA sales.
* Sales tax/VAT should be charged and collected from DTA customers.
* The SEZ unit needs to comply with the local state’s sales tax/VAT rules for such transactions.
### Circulars/Instructions:
* Various state tax departments have issued circulars clarifying this. For example, the **Central Board of Excise and Customs (CBEC) Circular No. 33/4/2006-IT dated 10th March 2006** and other state VAT circulars specify that supplies from SEZ to DTA are taxable.
* You may refer to your respective **State Commercial Taxes Department** website or circulars for specific notifications.
---
If you want, I can help find the exact circular relevant to your state or provide sample entries for accounting such transactions.
Under the Indian tax laws and SEZ (Special Economic Zone) regulations:
* **Sales made by an SEZ unit to the Domestic Tariff Area (DTA)** are considered as **taxable supplies** under the normal tax regime.
* SEZ units enjoy **exemption from state sales tax or VAT on sales made to SEZ units**, but **sales made by SEZ units to DTA customers are subject to sales tax/VAT** as applicable.
* Therefore, sales from SEZ to DTA attract **sales tax or VAT as per the local state law** where the DTA is located.
### Relevant points:
* There are **no exemptions or special provisions** that exempt SEZ units from paying sales tax on goods sold to DTA.
* SEZ units must register under VAT/sales tax for their DTA sales.
* Sales tax/VAT should be charged and collected from DTA customers.
* The SEZ unit needs to comply with the local state’s sales tax/VAT rules for such transactions.
### Circulars/Instructions:
* Various state tax departments have issued circulars clarifying this. For example, the **Central Board of Excise and Customs (CBEC) Circular No. 33/4/2006-IT dated 10th March 2006** and other state VAT circulars specify that supplies from SEZ to DTA are taxable.
* You may refer to your respective **State Commercial Taxes Department** website or circulars for specific notifications.
---
If you want, I can help find the exact circular relevant to your state or provide sample entries for accounting such transactions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Capital gain from sale of house property
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- TDS on Purchase of Immovable Property by NRI from NRI
- When TDS on GST applied
- Before GSTAT- APL-02 Vs APL-04
- LC charges in relation to Asset purchased should be Capitalised ?
- Annual return in Gst
- Transporter Declaration form
- Regarding TDS Applicability For Director Remuneration
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
