The Government of India has always maintained easy tax implications for Special Economic Zone (SEZ). In India, SEZ is a special zone where certain type of businesses enjoy tax benefits and less legal complications. As far as tax is concerned, SEZ are considered like foreign entities. This means whatever supply or input these units take/give are taxed in a different manner.
The government offers various incentives to SEZ units like duty free import and duty free domestic procurement of goods for development, operation and maintenance of SEZ units. But now the question is wheather SEZ units are exempted from eway bill or not. So lets discuss in detail about Eway bill applicability on SEZ units.
GST application on Special Economic Zone
Though SEZ enjoys certain tax benefits, it is not completely free from tax implications. Any goods or services supplied from a Special Economic Zone developer is considered as a zero-rated supply. This means no GST is applicable for supplies made to SEZ. Suppliers will consider this supply as export.
Supply to SEZ under GST can be done by:
- Using a bond or LUT, without any payment of IGST and later on claim credit of ITC, OR
- Pay IGST on supply and then claim refund on taxes paid.
On the other hand, when the SEZ supplies any goods or service to a party, it will be considered as a normal supply and IGST needs to be paid. Parties who come under Domestic Tariff Area (DTA) will fall under an exception category. Here, the supply will be considered as an export, hence, custom duty and other related charges would be paid by the receiver of goods/ services.
E-Way Bill application on Special Economic Zone
When it comes to handling e-Way bill, SEZ is NOT exempted. The movement of goods from SEZ unit is treated as inter-state movement even the SEZ is located within state.
As under the normal situation, every transporter should obtain an e-Way bill if an inter-state transport of goods is involved whose value is more than ₹50, 000. Similarly, in this case, SEZ units are also required to obtain an e-Way bill for inter-state transport.
For the purpose of obtaining the e-Way bill, they are required to follow the same e-Way bill generation process. Check Here for More Information
Who Will Generate eWay Bill?
The consignor or consignee should generate eway bill for movement of goods from or to SEZ units. If consignor or consignee are not generating eway bill then the transporter can also generate the eway bill from invoice.
In case a SEZ is supplying goods to Domestic Tariff Area (DTA), the registered user should responsible for generating the e-Way bill before the goods are sent.