Question8:

We ( PML) is a Mfg. unit in SEZ in ( Andhra Pradesh) ,PML got an order from Prime Hitech engineering Ltd , is located in same SEZ area in Andhra Pradesh., Both are registered under GST, please advise, the transaction between PML To PHEL treated as export , interstate or intrastate. If the said transaction treated as export transaction ( Zero rated) , in that case ,are we liable to submit LUT to the concern authority ?

Answer:
SEZ area though located within the territory of India is treated as foreign land for all practical purposes. For transacting business by a unit located in SEZ area with another unit also located in the zone there is no requirement of executing Bond/LUT. The supply made by you to another unit within zone would be treated as export and for the recipient it would be treated as import. However, if you are transacting business from DTA then of course you will need LUT/Bond or make supply on payment of integrated tax. After completing your transaction you will have to procure certificate of receipt of goods in the zone from the specified officer in the zone and can claim refund of tax paid as per the provisions of Section 54 of CGST Act, 2017 read with Rule 89 and 96 of CGST Rules, 2017. (Reply dt. 09/11/2017)