The Finance Ministry has exempted the goods and services imported by a unit or a developer of a special economic zone (SEZ) from levy of integrated goods and services tax (iGST).
Pratik Jain, Partner and Leader-Indirect Tax, PwC India, said that supplies to SEZs are zero rated and any imports of goods into SEZs are not taxable.
This latest exemption from iGST brings the same position that existed pre-GST as well, Jain told BusinessLine .
“This exemption was expected. The basic idea is supplies to SEZ must not attract GST, whether it is domestic supplies or from abroad,” he said.
R Muralidharan, Senior Director (indirect taxes), Deloitte in India said that the upfront exemption from iGST to goods procured by SEZ units will help reduce the working capital requirements of these units.
Abhishek Jain, Tax Partner, EY, said that continuation of upfront exemption of GST for procurement of both goods and services by SEZs will benefit them and prevents any unwarranted blockage of working capital.