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SEZ under GST

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Neha Mali (Querist)

08 July 2017 Hey hi... Can anyone tell me about the following questions related to SEZ 1. Any import of service from abroad by SEZ is liable for GST under RCM? since the place of provision is outside India. 2. Same question but with associated enterprise, what will be the impact? 3. Reimbursement expenses claimed by employees of SEZ unit, is SEZ unit liable to pay GST under RCM?

Rajesh Kumar

Rajesh Kumar (Expert)

08 July 2017 For the purposes of taxation, SEZ is presumed to be outside domestic tariff area. Thus domestic taxation provisions are not applicable on SEZ units. Any import into SEZ units is fully exempted [Section 26(1)(a) of SEZ Act]. Even Service Tax or central excise duty is exempted. Theoretically it can be said that after GST application, GST taxes are not exempted under Section 26 of the SEZ Act. But this is merely an temporary anomaly, and I am sure it shall be removed very soon with retrospective effect. As these laws are not applicable on SEZ units, there is no question of any payment of duty on reverse charge method.

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