Question 48:

We are having the query:
1. Is SEZ unit located in SEZ is required to obtain LUT for export of goods?
2. What happens if LUT not obtained for FY 2017-18? What is remedy to avoid any liability of IGST on exports made?
3. If the purchase made is rejected what is the procedure in GST to return the purchase made? Will it require to issue taxable invoice and pay GST of just return the goods and the seller will reverse the bill raised?
 
Answer

 Point wise reply of your query are as follows:-
1. SEZ deemed in foreign territory and governed by SEZ Act and other related provisions. Requirement of LUT in GST is not for SEZ unit for export.
2. As per Rule 96A read with Circular No. 8/8/2017-GST, LUT has to be furnished before affecting Exports in any Financial year. Their is no remedial measure for filling LUT for the back period. 
Department may impose General penalty under Section 125  of CGST for not following export procedure  which may extend to twenty five thousand rupees. But you should pay penalty only after it is imposed. There are a chances of waiver of penalty.
 
3. There are two options to treat the returning of goods.(not for SEZ unit)
1. By returning goods to the supplier against Challan/ Debit note issued by recipient against which supplier will have to issue credit note u/s 34 and the same will be recorded in the corresponding tax period returns.
2. By returning goods against tax invoice as supply. (Reply dt. 06/4/2018)