SEZ Unit Receiving Renting of Immovable Property Service from Government DepartmentLiability to Pay TaxCA. Satyadev Purohit

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The Tax Publishers GST--Special Economic Zone SEZ Unit Receiving Renting of Immovable Property Service from Government Department--Liability to Pay Tax CA. Satyadev Purohit The learned author seeks to analyse an issue as to whether a SEZ unit receiving renting of immovable property service from a local authority is liable to pay tax on reverse charge basis, or such services provided to the SEZ unit would be regarded as zero rated supply within the meaning of section 16 of the IGST Act. The related issued is being discussed in the light of a recent AAR Ruling in the case of Portscap India (P) Ltd., In re (AAR-Maharashtra). 1. GST on Supply of goods or services to SEZ Unit or SEZ Developer As per section 7(5)(b) of the Integrated Goods and Services Tax Act, 2017 (in short "the IGST Act"), supply of goods or services or both to or by a Special Economic Zone (SEZ) developer or a Special Economic Zone unit shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. Also, as per clause (i) of first proviso to section 8 of the IGST Act, supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit shall not be treated as intra-State supply. The Central Government vide Notification No. 18/2017-Integrated Tax (Rate), dt. 5-7-2017, has exempted services imported by a unit or a developer in the Special Economic Zone for authorised operations, from the whole of the Integrated Tax leviable thereon under section 5 of the IGST Act. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Special Economic Zone

SEZ Unit Receiving Renting of Immovable Property Service from Government Department--Liability to Pay Tax

CA. Satyadev Purohit

The learned author seeks to analyse an issue as to whether a SEZ unit receiving renting of immovable property service from a local authority is liable to pay tax on reverse charge basis, or such services provided to the SEZ unit would be regarded as zero rated supply within the meaning of section 16 of the IGST Act. The related issued is being discussed in the light of a recent AAR Ruling in the case of Portscap India (P) Ltd., In re (AAR-Maharashtra).

1. GST on Supply of goods or services to SEZ Unit or SEZ Developer

As per section 7(5)(b) of the Integrated Goods and Services Tax Act, 2017 (in short "the IGST Act"), supply of goods or services or both to or by a Special Economic Zone (SEZ) developer or a Special Economic Zone unit shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

Also, as per clause (i) of first proviso to section 8 of the IGST Act, supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit shall not be treated as intra-State supply.

The Central Government vide Notification No. 18/2017-Integrated Tax (Rate), dt. 5-7-2017, has exempted services imported by a unit or a developer in the Special Economic Zone for authorised operations, from the whole of the Integrated Tax leviable thereon under section 5 of the IGST Act.