Whether Bond or LUT required to be filed if sale/supplies are made to SEZ under GST?

This is perhaps an important question with a simple answer. Under GST regime, if anybody wants to make zero rated supplies without charging GST then he needs to file bond or LUT as the case may be to the central department before making any zero rated supply.

Zero rates supply shall include export and supplies/sale made to Special Economic Zone (SEZ). In other words, any supply or sale made to SEZ is treated at par with normal export sales. Therefore, if any goods are sent to SEZ, the same shall be treated as export and if any supply is received from SEZ, the same is treated as imports.

Whether bond or LUT is required to be filed for SEZ?

Since any supply made to SEZ is treated at par with the normal export supply, in that case LUT and bond shall be required to be filed. Further, in case bond is filed, a BG of 15% shall also required to be filed.

Example to understand it better

Mr. A incorporates a company to start the supply to the SEZ . He expects the turnover to be around Rs.50 lakh. Calculate the bond amount and the BG required to be filed with the central tax department. (Assume GST rate 18%)

Total bond should be equal to tax liability on export. Hence, the bond amount shall be:

• Bond amount = Rs.9 lakh (18% of Rs.10 lakh)
• Bank Guarantee = Rs.1,35,000/-

Conclusion

In case you want to file the LUT or bond, please write to us at info@hubco.in