Does SEZ unit need to pay GST on RCM basis?


Does SEZ unit need to pay GST on RCM basis?


Case Name : In re Waaree Energies Limited

Ms Waaree Energies Limited is engaged in the manufacture of solar modules and are registered under the category of taxpayer as an “SEZ unit”. Applicant avails services such as Goods Transport Agency (GTA), legal services from Advocate, Security Services, bus hiring for employees (specified services) from Domestic Tariff Area for their SEZ unit.

The contention arises from Notification No. 10/2017-IT(Rate) dated 28.06.2017, which mandates RCM for certain services. The applicant is of the belief that being an SEZ unit, they are not liable for GST under RCM. Additionally, Rule 30 allows DTA suppliers to clear services to SEZ units as zero-rated supplies under Section 16 of the IGST Act, 2017 either under bond or legal undertaking or under any refund procedure permitted under GST.

Moreover, Notification No. 18/2017-Integrated Tax (Rate) dated 5.7.2017 exempts services imported by SEZ units for authorized operations from IGST. The SEZ Act, 2005, reinforced by Section 51, asserts the overriding effect of SEZ provisions on conflicting laws. The applicant further invoked Section 16(3) of the IGST Act, 2017, arguing for the option to provide a Letter of Undertaking (LUT) for GST exemption on DTA supplies to SEZ units.


The applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notification No. 10/2017-IT(Rate) dated 28.06.2017 as amended from time to time, subject to furnishing a LUT or bond as specified in condition (i) of para 1 of Notification No. 37/2017 —Central Tax dated 4.10.2017.


The copy of the order is as under:


Waaree Energies limited


Krishnakant Jakhotia
Mobile No :- 9422507911
Email Id :-