Supply to sez

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This query is : Resolved

Sreekumar (Querist)

25 January 2012 We are manufacturers and received an order from customer (trader) asking us to supply excisable goods without payment of duty to a SEZ unit, under our LUT submitted to our range.

Can we do this or should ask our customer (trader) for CT1 certificate.

Thanks in advance

U S Sharma

U S Sharma (Expert)

26 January 2012 there is no bar to use LUT for supply to SEZ,

https://centralexcisetrichy.gov.in/newcentral/tradenotice/ce/yr0607/tn18.pdf

however the duty liability in case of any default would be on factory of manufacture, as the LUT belong to them,

in case of CT-3 issued by SEZ, the duty liability would be on SEZ

in case of CT-1 issued by trader, the duty liability would be on trading party.

in a nutshell all procedures and formalities would be maintained by the holder of instrument , LUT/CT-3/CT-1.

Swanand

Swanand (Expert)

30 January 2012 In your case clear that to whom you are billing to ? Whether it is to trader or Whether it is to SEZ unit ?

If you are billing to SEZ unit directly there is no need of CT forms , you can supply goods to SEZ unit against FORM ARE I and endorsement of ARE I by SEZ authorities is enough for Duty free supplies.

If you are billing to Trader , you are not liable for duty exemption.

Sreekumar

Sreekumar (Querist)

30 January 2012 In this case, Consignee is SEZ unit, and customer is trader. Now, what will the solution?

Sreekumar

Sreekumar (Querist)

30 January 2012 In this case, Consignee is SEZ unit, and customer is trader. Now, what will the solution?

Swanand

Swanand (Expert)

30 January 2012 This transaction in technical terms in called first hand dealing in hands of SEZ unit.

In this case duty exemption will not be allowed as billing party is not SEZ unit. Hence you should charge Excise and supply goods.

Consignee in this case is irrelevant