The Maharashtra Authority of Advance Ruling (AAR) held that GST under reverse charge mechanism payable on procurement of renting of immovable property services from Special Economic Zones (SEZs).
The applicant, M/s Portescap India Pvt. Ltd. is a SEZ Unit, situated in Maharashtra, is engaged in the manufacture of customized motors in India and exports the said goods. Applicant procures Rental Services from Seepz, SEZ Authority, Mumbai-400096 which is a Local authority. Notification No. 18/2017-LT. (Rate) dated 05.07.2017 exempts services imported by a unit or a developer in the Special Economic Zone (SEZ) for authorized operations, from the whole of the Integrated Tax leviable thereon under Section 5 of the IGST Act, 2017.
The applicant has sought the advance ruling on the issue whether tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority in accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25.01.2018. If, answer to the above point is in the affirmative, then the tax under reverse charge mechanism is required to be paid under which tax head i.e., IGST or CGST and SGST.
The coram of Rajiv Magoo and T.R.Ramnani held that tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority in accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25.01.2018.
The AAR further clarified that the tax will be discharged by them under Integrated Goods and Service Tax (IGST) head.
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