SEZ units furnishing LUT are not required to pay GST on RCM for services availed from DTA supplier

Last updated: 04 May 2024

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The Gujarat Advance Ruling Authority has ruled that Special Economic Zone (SEZ) units do not need to pay Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for services received from Domestic Traffic Area (DTA) suppliers. This exemption applies if the SEZ unit has furnished a Letter of Undertaking (LUT) or bond, treating themselves as a deemed supplier. This decision aligns with previous rulings and clarifies that SEZ units can procure services for their authorised operations without paying IGST, provided they meet the LUT/bond requirements.

Court :
Gujarat, AAR

Brief :
The Gujarat, AAR in the matter of M/s. Waaree Energies Limited [Advance Ruling No. GUJ/GAAE/R/2024/09 dated April 16, 2024] held that the Special Economic Zone units ("SEZ unit") are not required to pay GST under Reverse Charge Mechanism ("RCM") on any service received from suppliers located in the Domestic Traffic Area ("DTA") for carrying out the authorized operation in the SEZ unit, provided that a Letter of Undertaking ("LUT") or bond as a deemed supplier of such services is furnished as mentioned in Notification 37/2017-Central Tax dated October 04, 2017.

Citation :
Advance Ruling No. GUJ/GAAE/R/2024/09 dated April 16, 2024

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Attached File : 671907_5669_waaree_energies_limited.pdf

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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