Separate GST Registration for Each SEZ Unit: New Rule

According to the recent announcement of GST draft rules, each unit in a special economic zone (SEZ) must have a separate registration number under the new tax regime for the state where the business operation is carried out and where GST liability arises.

Under the draft registration rules, each SEZ unit or SEZ developer has to provide a separate application for registration as a business vertical. The units located outside SEZ can be registered at the state level in just one application. If a company has two or more units in the same SEZ then all the units must be registered through a separate application.

“Records will need to be maintained at unit level, rather than state level, which will add to the complexities,” says Bipin Sapra, Indirect Tax Partner, EY-India. “However, supplies to SEZ units are zero rated and need to be clearly identified. Maintenance of records, at unit level, will facilitate this.”

Under zero rated concept, the supplier doesn’t need to pay taxes and claims refunds if input taxes on supplying goods to a SEZ unit.

Source: ET Realty

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