Supply to unit situated in SEZ

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07 November 2025 I am transporter providing transportation service to unit situated in SEZ unit, without charging GST under LUT, can I do it ?? if yes whether I can take input tax credit of GST paid on input services used by me to provide services to SEZ Unit ??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 November 2025 Yes, you can supply transportation services to an SEZ unit without charging GST under LUT, and you are eligible to claim input tax credit (ITC) on input services used to provide such zero-rated supplies.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 November 2025 - Legal Basis: Supplies to SEZ units are treated as zero-rated supplies under Section 16 of the IGST Act, 2017.
- LUT Option: You can export services (including to SEZ units) without payment of IGST by furnishing a Letter of Undertaking (LUT) under Rule 96A of CGST Rules.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 November 2025 - Ensure the SEZ unit provides a Letter of Approval (LOA) from the Development Commissioner.
- Maintain endorsement from the SEZ officer on the invoice or other proof of receipt of services.
- Keep records of LUT filing and acknowledgment.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 November 2025 Eligibility for Input Tax Credit (ITC)
- ITC on Inputs and Input Services: Since your supply is zero-rated, you are entitled to claim full ITC on GST paid on input services (e.g., fuel, vehicle maintenance, tolls, etc.) used to provide transportation to SEZ units.
- No Restriction Under Section 17: Zero-rated supplies are not subject to the proportionate reversal rules under Section 17(2) and Rule 42.
- Refund Option: You may also opt to claim refund of unutilized ITC under Rule 89 if you are accumulating credit due to LUT-based exports.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 November 2025 Good luck...

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