Advantage - CBEC's Customs Manual 2023 - Customs

20. Advantage 20.1 Being in a SEZ can be advantageous to a certain extent when it comes to taxes. Any supply of goods or services or both to a Special Economic Zone developer/unit will be considered to be a zero-rated supply. That means these supplies will attract Zero tax rate under GST. In other words, supplies into SEZ are exempt from GST and are considered as exports. Therefore, the suppliers supplying goods to SEZs can: (a) Supply under bond or LUT without payment of IGST and claim credit of ITC; or (b) Supply on payment of IGST and claim refund of taxes paid. Any supply of goods or services or both to or by an SEZ developer/unit to DTA are chargeable to duties of customs under the Customs Tariff Act, 1975 as leviable on such goods when import into the country( refer Section 30 of the SEZ Act, 2005).