-SEZs
No change in the operation of the SEZ scheme.
SEZs can continue to import raw materials without payment of any duty. Supplies to SEZs would also be treated as Zero rated supplies.
EOUs
Imports by EOUs
The EOUs will continue to get exemption from payment of the basic Customs Duty, however they will have to pay IGST on imports.
• On the IGST paid on import of inputs, ITC would be available which can be utilized for payment of GST payable on the goods cleared in the DTA. Refund of the unutilized ITC can also be claimed under Section 54(3) of CGST Act.
• The facility of duty free import of capital goods under the Procurement Certificate procedure will not be available. To import capital goods at zero duty, EOUs will have to follow procedure under of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.
Supplies to EOUs
Suppliers to EOU will pay normal GST as they would pay while supplying to a domestic unit. An
EOU can take Input Tax Credit (ITC) of the GST paid while taking domestic supplies and same canbe used for payment of GST on finished goods cleared in DTA.
DTA sale
DTA sale shall be subject to fulfillment of the following conditions:
a) fulfillment of positive NFE
b) payment of applicable GST on product under DTA sale
c) Reversal of the BCD exemption availed on the inputs used in the manufacture of products under DTA sale. The reversal of BCD would be as per Standard Input Output norms published by the DGFT or norms fixed by Norms Committee of DGFT (where no SION is fixed).
d) Refund of any benefits taken on procurement of inputs from DTA under Chapter 7 of FTP and used in the manufacture of products under DTA sale.
Inter Unit Transfers
Supply of goods from one EOU to another EOU (inter-unit transfer) will require payment of applicable GST. The BCD exemption availed on inputs by the supplier EOU, utilized in such transferred goods would have to be reversed by the recipient EOU at the time clearance of such goods in DTA. Same provisions apply on sending of Goods for Job work.
Exempt products
For GST exempt Goods like Petroleum products, the existing provisions provided under notification no. 52/2003-Cus, notification no. 22/2003-CE and Notification no. 23/2003-CE will continue to apply for import, domestic procurement and domestic clearance respectively.