No GST under RCM on supply of renting of immovable property by SEZ authority if LUT is furnished by recipient

[Rajeev Jain]

Whether supply of service by way of renting of immovable property by SEZ authority to SEZ unit qualifies as zero-rated supply and GST is payable under reverse charge by recipient of supply.

HELD That:

Provisions of zero-rated supply includes within its ambit supply of services where GST is payable under reverse charge by recipient of supply.

Provisions relating to zero-rated supplies only provide for supply of goods or services or both to SEZ developer or SEZ unit and does not mention about type of supplier i.e., whether supplier is located in Domestic Tariff Area (DTA) or Special Economic Zone (SEZ)

Irrespective of whether said service is supplied by a supplier located in DTA or SEZ, GST is not payable under reverse charge by recipient provided that a letter of undertaking (LUT) is furnished by recipient of supply.

Whether supply of services by suppliers located in DTA to SEZ unit qualifies as zero-rated supply and GST is payable under reverse charge by recipient of supply

HELD That:

All supply of services procured by SEZ unit from suppliers located in DTA will not attract GST.

GST is not payable under reverse charge on services received from DTA supplier for carrying out authorized operation in SEZ, provided that a letter of undertaking is furnished.

Relevant Provisions:

Sections 5 and 16 of Integrated Goods and Services Tax Act, 2017

Notification No. 10/2017 - Integrated Tax (Rate), dated 28-06-2017; Notification No. 03/2018 - Integrated Tax (Rate), dated 25-01-2018; Notification No. 13/2017 - Central Tax (Rate), dated 28-06-2017; Notification No. 37/2017 - Central Tax, dated 04-10-2017