GST Refund on Civil Contracting for SEZ

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AJM_India

Director

75 Points Posted on 25 November 2020

We provide Civil Contracting services to SEZ in India.

We do not charge GST to client under FORM GST RFD – 11 (Letter of Undertaking for Exports of Goods or Services). However we have to pay GST to all suppliers of various input Materials and sub-contracting services used in the project.

We have 2 questions

Apart from PO, do we need any document from Client after the contract is over to justify non charging of LUT.
Is there a way to avoid paying GST on input credit by informing our suppliers.
1. If No, can we claim refund of input GST from Department?
2. If no, can we ask suppliers to not charge GST on their supply since we are providing SEZ Services.

Replies (2)

Bullseye Advisors

GST consultants

89 Points Posted on 26 November 2020

1. To be on a safer side, SEZ customer will have to get your invoices endorsed by the SEZ authorities and provide to you (under rule 89 of CGST/SGST Rules and SEZ Rules). Endorsed invoices along with customer's SEZ letter of approval copy may be kept in your records, since these may be asked during scrutiny by tax officers.

2. If endorsed invoices are availed in terms of (1) above, then you may apply for refund of GST charged by your suppliers and obtain cash refund of the ITC from tax authorities. Outright exemption may be difficult unless any deemed export benefit is claimed under FTP which is available only for goods and not services.