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TMI BlogSupply of goods from EOU to SEZX X X X Extracts X X X X X X X X Extracts X X X X ..... Supply of goods from EOU to SEZ X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of manufacturing of such goods, is required to be done ?. Reply By YAGAY andSUN: The Reply: In your case, since you're an EOU (Export Oriented Unit) making supplies to an SEZ (Special Economic Zone), and you're availing exemptions of customs duties on inputs under the First Schedule to the Customs Tariff Act, 1975, the key issue is whether you need to reverse those exemptions when s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch goods are supplied to SEZs. ✅ Clarification under Indian Tax Laws: As per prevailing Customs and GST regulations, here's how it works: 🔹 Supplies from EOU to SEZ - Deemed Exports * Supplies made by EOU to SEZ units are considered "exports" under both Customs Act and GST Law. * SEZ is treated as being outside the customs territory of India for the purpose of authorized oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. So, no reversal of duties is required as long as the supply is for authorized operations of the SEZ. 🔹 Exemption Availed on Inputs - Is Reversal Required? * No, reversal of customs duties availed as exemption under the First Schedule to the Customs Tariff Act is not required if: * The finished goods are supplied to SEZ for authorized operations. * The supplies are made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a proper Bill of Export or through ARE-1 procedures. * The SEZ unit provides necessary endorsement confirming receipt of goods for authorized operations. 🔸 Supporting Legal References: * Section 26(1) of SEZ Act, 2005: Exempts SEZ from duties on goods used for authorized operations. * FTP (Foreign Trade Policy) and CBIC Circulars (e.g., Circular No. 29/2006-Cus): Clarify that suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies from EOU to SEZ are treated as exports. * Rule 6 of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017: Also supports that no duty reversal is needed if the final product is exported or deemed exported. 🔹 When Reversal Would Be Required: * If the supply to SEZ is not for authorized operations. * If proper export documentation is not maintained. * If goods are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iverted to DTA (Domestic Tariff Area) instead of SEZ. ✅ Conclusion: If you're supplying from EOU to SEZ with proper export documentation, and the goods are used for authorized operations, reversal of custom duty exemption is NOT required. Reply By Shilpi Jain: The Reply: Customs duty reversal not required as the goods are not cleared to any DTA unit. Clearance to SEZ will not entail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reversals.
Reply By Shilpi Jain:
The Reply:
The relevant notification in this regard is 52/2003-Cus.
Reply By KASTURI SETHI:
The Reply:
Supply to SEZ is zero rated. It is export. Hence reversal not required. X X X X Extracts X X X X X X X X Extracts X X X X
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