Question ID : 37984

SEZ UNIT

Sir We are suppling material to unit In SEZ. As per his registration certificate the status of Tax payer is "Regular". We are treating it as zero rated and supplying it under LUT without payment of duty. On pointing out that company that they are not registered as SEZ Unit they Took new registration number under Status "SEZ Unit". Now i want to know for old supply can we treat it as zero rated or we have to raise debit note. or it does not make any difference for status as the unit is situated in SEZ.

Answer ID : 76287

Since the company has taken the registration as SEZ Unit now. Hence in spite of it that it was situated in SEZ area does not qualify the entity as SEZ unit. Therefore in my professional view you should raise the debit note till the date of registration of the entity as SEZ unit and accordingly deposit the tax with required authority.

Answer ID : 76305

On the date of your supply, the Customer was not registered as SEZ unit. If you now attempt to revise the GSTIN of customer, it would be not be possible to revised your invoice as customer registration (as SEZ) will not align with actual date of invoice. When your outward supply will be taken up for verification, mistake of customer at the time of his registration will not be appreciated by revenue authorities to allow you refund. And your refund could be rejected and additionally, output tax demanded. If this is the most likely outcome, it would least likely that any appellate authority to condone this lapse (by customer) and allow you refund. Option A, go ahead and take a chance as above. Option B, pay GST on your original invoice and collect it from customer. Customer will be eligible for credit and refund against subsequent refund. But, customers being customers might not align with your request. You are in a difficult situation but your position could get worse if you do not engage in discussions with customer or file refund application and agitate matter in appeal. Please also consider, although not entirely your fault, you are not totally free from being held responsible for not verifying GSTIN validity before making such zero-rated supply. But, in any case, it is not advisable for you to tinker with your original invoice to revise GSTIN of customer in your GSTR 1 with correct SEZ-registration number. And then collect 'entry into authorized operations' approval from SEZ for these goods. After than try to file refund application for this supply based on these and other prescribed documents. Trust you have clearly understood what should not be done.

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