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TMI Blog2019 (3) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017 and are liable to IGST under Section 5(1) of the IGST Act, 2017. Out of these, only supplies made to SEZ developer / unit for authorized operations have been made zero rated, other are liable to IGST. The sub-section (1) of Section 53 of the SEZ Act, 2005 provides a deeming fiction whereby the Special Economic Zone shall be deemed to be a territory outside the customs territory of India and that too for the specific purposes of undertaking the authorized operations. The term customs territory cannot be equated to the territory of India. Further, the interpretation advanced by the appellant would lead to a situation where a Special Economic Zone would not be subject to any laws of India whatsoever. The entire SEZ Act, 2005 would be rendered redundant since it is stated to extend to the whole of India. Section 51 of the SEZ Act, 2005 provides for overriding effect in case there is anything inconsistent contained in any other law. However, no inconsistency between the provisions of the SEZ Act, 2005 and IGST Act, 2017 or CGST Act, 2017 / GGST Act, 2017 has been pointed out by the appellant - the reliance placed by the appellant on Section 53 and 51 of the SEZ Act, 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor located in SEZ, whether GST is required to be paid? 3. The GAAR, vide Advance Ruling No. GUJ/GAAR/RULING/2018/14 dated 30.07.2018 = 2018 (10) TMI 449 - AUTHORITY FOR ADVANCE RULING, GUJARAT , ruled as follows :- (i) The supplies made by M/s. Sapthagiri Hospitality Private Limited, 17-18, Sapthagiri Complex, Opp. The Gateway Hotel, Near Akota Garden, Akota, Vadodara- 390 002 (GSTIN 24AAMCS8870KIZN), a SEZ Co-developer, from their hotel located in non-processing zone of Dahez Special Economic Zone to the clients located in Special Economic Zone for authorized operations will be treated as zero rated supplies under the provisions of Section 16(1) of Integrated Goods and Service Tax Act, 2017 read with Section 2(m) of SEZ Act, 2005 (ii) The applicant is liable to pay GST on the services from their hotel located in non-processing zone of Dahez Special Economic Zone to the clients located outside the territory of Special Economic Zone under the provisions of Section 5(1) of Integrated Goods and Service Tax Act, 2017. 4. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal on 06.10.2018, along with request for condonation of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T will be applicable. 8.2 We have examined the argument. The reference in this regard may be made to the provisions of Section 16 of the IGST Act, 2017, pertaining to the Zero Rated supply. Sub-section (1) of Section 16 of the IGST Act, 2017 reads as follows :- Zero rated supply. 16.- (1) zero rated supply means any of the following supplies of goods or services or both, namely :- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. It is evident that clause (b) of sub-section (1) of Section 16 of the IGST Act, 2018 provides that supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit, is covered under zero rated supply . Thus, to be qualified as zero rated supply, the law specifically refers the supply to SEZ developer/unit and not to or by SEZ developer / unit. Therefore, the supply of service by the appellant would be liable to Goods and Services Tax, unless specifically exempted by law. 8.3 Here the moot point is as to whether the supply has been made to SEZ unit or the same is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or different Special Economic Zones. 9.3 It is observed that sub-section (1) of Section 53 of the SEZ Act, 2005 provides that a Special Economic Zone shall, on and from the appointed day, be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations. (emphasis supplied). It appears that the appellant has misconstrued that the said sub-section provides that a Special Economic Zone shall be deemed to be a territory outside the territory of India , that too for all purposes and no Indian Law (Including IGST Act, 2017) is applicable in SEZ except the SEZ Act, 2005 and the Laws which are specifically made applicable by SEZ Act, 2005. 9.4 The said understanding of the appellant does not appear to be correct. In fact, the sub-section (1) of Section 53 of the SEZ Act, 2005 provides a deeming fiction whereby the Special Economic Zone shall be deemed to be a territory outside the customs territory of India and that too for the specific purposes of undertaking the authorized operations . The term customs territory cannot be equated to the territory of India. Further, the interpretation advanced by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumed in Special Economic Zone itself, whether supplied to a unit or developer or any other person as the services provided by the appellant are authorized operations as per Letter of Permission. 11.2 Section 53(2) of the SEZ Act, 2005 creates a deeming fiction whereby a SEZ is deemed to be a port, airport, inland container depot, land station and customs stations under section 7 of the Customs Act, 1962. On the other hand, Circular Nos. 46/2017-Cus dated 24.11.2017 and 3/1/2018-IGST dated 25.05.2018 clarified applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse registered under section 57 or 58 or 58A of the Customs Act, 1962 (customs bonded warehouse), without payment of duty. The purpose of appointing any port, airport etc. under Section 7 of the Customs Act, 1962 is quite different than the purpose of licensing any warehouse under Section 57, 58 or 58A of the Customs Act, 1962. Therefore, the clarification issued for customs bonded warehouse are not applicable to the appellant even if a SEZ is deemed to be a port etc. under Section 7 of the Customs Act, 1962. Further, the appellant is engaged in providing services whereas the customs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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