CBIC clarifies Miscellaneous Issues related to SEZ and Refund of Unutilized ITC for Job Workers [Read Circular]

Job Workers - GST

The Central Board of Indirect Taxes and Customs (CBIC) has clarified certain miscellaneous issues related to Special Economic Zones (SEZ) and the refund of unutilized input tax credit for job workers under the Goods and Services Tax (GST) regime.

The circular clarified that the services of short term accommodation, conferencing, banqueting etc., provided to a SEZ developer or a SEZ unit shall be treated as an inter-State supply.

With regard to the issue whether the benefit of zero rated supply can be allowed to all procurements by a SEZ developer or a SEZ unit such as event management services, hotel and accommodation services, consumables etc, the Board clarified that under the present GST laws, if event management services, hotel, accommodation services, consumables etc. are received by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the specified officer of the Zone, the benefit of zero rated supply shall be available in such cases to the supplier.

It was further clarified that the fabric processors shall be eligible for refund of unutilized ITC on account of inverted duty structure under section 54(3) of the CGST Act even if the goods (fabrics) supplied to them are covered under notification No. 5/2017-Central Tax (Rate) dated 28.06.2017.

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