ABC Ltd. is situated at SEZ and selling their maximum goods to export without GST. When ABC Ltd is selling goods to domestic market (for example scrap), than it has charged GST on that and paid to custom dept along with custom duty. The issue is that without receiving GST and custom duty, custom dept not removing goods from SEZ and custom dept payment portal not link with GST dept payment portal hence at the time of filling GST return GST dept asking to pay again GST on such sale and If ABC Ltd will not show such sale on GST return (to avoid double taxation) than this will not reflect into 2A of purchaser. Provide solution.
ANSWER
Facts of the case:
A company Named ABC Ltd. Situated
at SEZ and selling maximum goods to export without GST.
It is selling goods to the domestic market (for example scrap), then it has
charged GST on that and paid to custom dept along with custom duty. The issue is
that without receiving GST and custom duty, custom dept not removing goods from
SEZ and custom dept payment portal not link with GST dept payment portal hence
at the time of filing GST return GST dept asking to pay again GST on such sale
and If it will not show such sale on GST return (to avoid double taxation) than
this will not reflect into 2A of purchaser.
Law Applicable:
Rule 48 of Special Economic Zones Rules, 2006
48. Procedure for Sale in
Domestic Tariff Area.-
(1) Domestic Tariff Area buyer shall file Bill of Entry for home consumption
giving therein complete description of the goods and/or services namely, make
and model number and serial number and specification along with invoice and
packing list with the Authorised Officers:
Provided that the Bill of Entry
for home consumption may also be filed by a Unit on the basis of authorization
from a Domestic Tariff Area buyer.
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SCHEDULE III of CGST Act, 2017
ACTIVITIES OR TRANSACTIONS WHICH
SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
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8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.
Interpretation:
The SEZ is considered as foreign land therefore supply of goods to the SEZ is
considered physical export and covered under zero rated supply.
The supply of goods from SEZ to DTA is considered import by the buyer and goods are cleared by the domestic buyer on filing of Bill of Entry for Home Consumption.
Conclusion: The clearance of goods from SEZ to DTA is neither a supply of goods nor a supply of services. Therefore not subjected to GST and not required to be shown in GSTR-1.
At the time of filing of annual return it is deducted from the total turnover shown in the Balance Sheet.
(Notification No. 74/2018 dt 31.12.2018 FORM GSTR-9C Part 2 Entry No. K) (Reply dt. 27/11/2021)