Sales from SEZs to domestic mkt to attract IGST from July 1

Sales from special economic zones (SEZs) to domestic market will attract IGST with effect from July 1, according to the Central Board of Excise and Customs (CBEC).

An SEZ area is considered to be a foreign territory for trade operations and duties, and is mainly set up for promoting export.

At present, goods supplied from an SEZ unit to a DTA (domestic tariff area or outside SEZ) attracts customs duty as products coming from these zones are treated as imports into the country.

"Exports are zero rated supplies under the GST law.

Exporter would be entitled to refund of IGST (Integrated Goods and Services Tax) paid on exports or refund of accumulated input tax credit on inputs used towards exports," it said.

It added that refund of IGST for exports would be based on GSTIN (Identification Number) declared in the shipping bill.

It further said that the drawback scheme would be continued and a new drawback schedule will be released on July 1.

Duty drawback is refund of duties on imported inputs for export items.

The existing duty drawback scheme, it said, will continued for three months from July 1 as part of the transition to GST.

Exim (export-import) scrips cannot be used for payment of IGST, it added.

Further, imports under advance licences and Export Promotion Capital Good (EPCG) scheme will not be exempted from payment of IGST and CGST compensation cess.

It also said that cargo arriving up to June 30 would not attract IGST and CGST compensation cess, even though it is cleared after July 1.

The Central Hall of Parliament will host a midnight function on June 30 for the launch of GST.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)