Special economic zone party - hotel

Great question about GST treatment when a party from a Special Economic Zone (SEZ) stays at your hotel! Here’s the breakdown:

GST on Hotel Stay by SEZ Party:

1. SEZ Status and GST:
   SEZ units are considered as "inter-state supplies" for GST purposes even if the hotel is located in the same state as the SEZ unit.

2. Which GST to Charge?

   • Since SEZ is treated as a separate customs territory, the supply of services (hotel stay) to an SEZ unit is treated as inter-state supply.

   • Therefore, you must charge IGST (Integrated GST) on the hotel bill to the SEZ unit.

3. Why Not CGST/SGST?

   • CGST and SGST are charged on intra-state supplies (within the same state).

   • But supply to an SEZ unit is considered inter-state supply even if physically located in the same state.

Summary:

Important:

• Ensure the SEZ party provides their SEZ unit registration number (unique GSTIN for SEZ).

• Maintain proper documentation to support that the supply is made to an SEZ unit.