Question25
Our unit situated in SEZ Zone We are procuring goods and services from domestic market mostly under LUT or after payment of GST which is refunded to the supplier when supplier applies for refund. But in some cases, domestic supplier do not want to do the above procedure, they are saying we will charged IGST from you and we will not file any LUT or we file any refund claim if you want to goods and service of us. Otherwise we will not supply you the goods or services. Being goods or services of specific type hence we have to take goods or services from those supplier and we are paying them IGST. our question is that whether SEZ unit can avail the credit of IGST paid by them on the supply received by SEZ unit which is call ZERO rated supply under which section and
(ii) SEZ unit can file refund of unutilized credit of GST lying or paid to those supplier under which section or notification.
(iii) Whether SEZ unit can pay IGST credit availed on above supply for payment of GST on its DTA sale.

Answer
The Supply to SEZ is considered as Zero rated Supply u/s 16 of IGST Act. Therefore it as good as exporting of material to other country. Thus accordingly the unit located in SEZ will be treated as importer in Foreign Land. So SEZ neither claim ITC nor claim refund. The process of Refund or Export under LUT will apply as it applies to other physical export. (REPLY dt. 20/02/2018)