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Sales to sez unit by a trader

Nikhil Jain (Co Owner) (55 Points)

26 March 2012

Dear Experts,

I am a trader registered with Excise & Sales Tax Department. I want to know the complete procedure for making sales to SEZ Units. Also What all Forms I need to collect from the customer and what all forms do I need to submit (If any) to my supplier (Manufacturer).

If Manufacturer will treat it as normal sales where I am the buyer charging full excise and vat. How can I claim refunds.

Is there any procedure where the hassles of taking refund dont occur and directly manufacturer issues invoice in my favour without charging any excise and tax against submission of proof of export/sale to SEZ.

Thanks in Anticipation.

Nikhil Jain.

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16 Replies

Abbas (Senior Officer Finance and Administration) (53 Points)
Replied 26 March 2012

Dear Nikhil,

If you are selling goods to SEZ reg company in case of intrastate sale you should charge proper VAT as there is no exemption for VAT under SEZ act. If it is interstate sale then you can ask form 18 (CST exemption form in duplicate) and sell your good without charging any CST. While filing your VAT/CST return you should file one copy of form 18 along with the return after mentioning the sale of exempted goods in appropriate annexure. Hope this will clear you query

Thanks

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 27 March 2012

There is no Complex Procedure for sales made in SEZ units .

The sale made in SEZ units is completely exemt from VAT of any state . So no need to collect tax and charge Excise duty on sale made in SEZ units

As far as state of Maharashtra is concerned you need to obtain I FORM from your customer .

In absence of receipt of I FORM from your customer the goods sold in SEZ units shall be taxed at a REVENUE NEUTRAL RATE ( RNR ) .In maharashtra @ 12.5 % and you will have to pay from your Pocket .

You will get set off for the goods purchased by you from your manufacturer .

Ok ..

1 Like

Nikhil Jain (Co Owner) (55 Points)
Replied 27 March 2012

Thank You Mr. Sajid, But what about excise. SEZ Units are exemt from Excise also and how can I claim benefits of excise duty exemption.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2012

exemption from excise for SEZ is only possible when goods are cleared from mnaufacturing premises,

for traders they have to issue excise invoices , pass on the duty and SEZ is entitled to avail input credit on the same.

2 Like

Nikhil Jain (Co Owner) (55 Points)
Replied 28 March 2012

Originally posted by : U S Sharma
	exemption from excise for SEZ is only possible when goods are cleared from mnaufacturing premises, for traders they have to issue excise invoices , pass on the duty and SEZ is entitled to avail input credit on the same.

Dear Mr. Sharma,

Thanks for your information, However I came to know from my tax consultant that we traders can claim excise refund from department if material is sold to SEZ Unit, But he is not sure about the procedure.

However is there any procedure in which we trader can deal with SEZ. For eg is it possible if a manufacturer does not charge excise and cst/vat while issuing invoice and put the name of SEZ in Consignee and put traders name in Buyer.

Thanks & Regards,

Nikhil Jain.

sharinaB (none) (23 Points)
Replied 30 March 2012

Thanks for the idea.

sankit shah (PRactice) (30 Points)
Replied 06 April 2012

I m trader, Purchase from register Delear,, and sale to SEZ unit than can claim excise duty refund.

Nikhil Jain (Co Owner) (55 Points)
Replied 06 April 2012

Dear Sankit Shah,

Are you asking or answering?? If answering.. what is the procedure??

sankit shah (PRactice) (30 Points)
Replied 06 April 2012

Asking?

Can i claim refund or not?

if yes than what Procedure?

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 07 April 2012

The DTA (Domestic Tariff Area) supplier supplying goods to a Unit or Developer shall clear the goods under ARE-I referred to in notification number 40/2001- Central Excise (NT) dated the 26th June, 2001 in quintuplicate bearing running serial number beginning from the first day of the financial year. Dealer selling goods in the course of inter state trade or commerce to a registered dealer under the Central Sale Tax Act, 1956 shall furnish a declaration in Form – I prescribed under the Central Sales Tax (Registration and Turnover) Rules, 1957. You can clear goods without payment of duty.

parmar gunvant jaikishan (Jr. Accounts Executive) (30 Points)
Replied 24 May 2012

Can any one clarify, what are the requirement for sale made to customer in GUJARAT SEZ, we are based in UP

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 25 May 2012

The supplies from the DTA to SEZ unit or developer without payment of central excise duty shall be on the cover of ARE1, as in case of normal exports out of India i.e. under bond / undertaking, executed by the DTA supplier with the jurisdictional Central excise officer. A copy of ARE-1 and bill of export needs to be forwarded to the central excise officer having jurisdiction over the DTA within 45 days. Under VAT/CST, its just like an export bill, No H Form is required.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 May 2012

when goods are procured for DTA sales, then its tough to get the refund by selling to SEZ, however trader can execute B-1Bond, Ct-1 and can receive goods against AR-1/3 for supply to SEZ without payment of duty.

in case you have received goods for DTA then get in touch with your R/O and ask him that you intend to clear the goods under ARE-1 under claim for rebate of duty (40/2001), though such process is eligible at manufacturing point only, but if your records of input and output is maintained good and the R/O get satisfied with your records then he will allow it by physically sealing and signing the ARE-1,

once the ARE-1 is accepted by your R/O and goods are cleared under cover of same, you will get eligible for claim of rebate of duty paid.

srinivas (Dyputy Manager) (32 Points)
Replied 30 July 2014

Dear Sirs, We are SEZ unit, we are procuring material from local market with out VAT bill and we are providing APSEZ notification copy to traders. Now commercial Tax people ask traders get the Form I. is valid for local procurement? Because Form I related to Central Tax. Is there any notification? Which form we have to provide for Local Traders?

regards

srinivas