GARUDA POWER PRIVATE LIMITED

The Applicant is a dealer of Cummins India Limited functioning mainly in the trading of diesel engines and its spare parts along with services of diesel engine, either on AMC basis or on required basis.

The Applicant sought Advance Ruling on "Whether supply of goods and on-site services to customers in SEZ area to any SEZ unit or SEZ developer is zero rated supply under section 16 of IGST Act or GST is chargeable for the supply of goods or services to SEZ unit or SEZ developer?"

Section 16 of IGST Act deals with “zero rated supply” which includes the supply of goods and services or both to a Special Economic Zone Unit or a Special Economic Zone Developer.

Since the Applicant supplies to units and developers of Special Economic Zones only the provisions of Section 16 of IGST Act will be applicable and the tax liability will be at zero rate under sub section 1(b) of the IGST Act. He may supply without paying tax subject to the provisions under section 16 (3) (a), or he may supply on payment of tax and claim refund subsequently under section 16 (3) (b) of the IGST Act.

CRUX: The Applicant may supply without paying tax subject to the provisions under section 16 (3) (a), or he may supply on payment of tax and claim refund subsequently under section 16 (3) (b) of the IGST Act.