Gujarat AAR Declines To Answer GIFT SEZ Co-Developer's GST Zero-Rating Query On SEZ Supplies

The Gujarat Authority for Advance Ruling has declined to answer whether endorsement by the Specified Officer is mandatory for claiming zero-rated GST treatment on supplies involving Special Economic Zone entities and whether alternative documentary evidence could suffice. It held that the applicant's queries fell outside the scope of advance ruling jurisdiction.

A bench of CGST Member Vishal Muni and SGST Member Subham Roy passed the ruling on an application by Waystar Properties LLP, a co-developer in Gujarat International Finance Tec-City (GIFT SEZ).

“we find that the question does not, in any way, relate to: (a) classification of any goods or services (or both) OR (b) applicability of a notification issued under the provisions of this Act OR (c) determination of time and value of supply of goods or services or both OR (d) admissibility of input tax credit of tax paid or deemed to have been paid OR (e) determination of the liability to pay tax on any goods or services or both OR (f) whether applicant is required to be registered OR (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.,” the bench said.

The applicant said it leases commercial premises within GIFT SEZ. It receives services from Domestic Tariff Area suppliers as well as other SEZ entities for authorised operations.

It argued that while supplies to SEZ units for authorised operations qualify for zero-rated treatment, authorities were insisting on invoice-level endorsement from the Specified Officer even in intra-SEZ transactions.

According to the applicant, this created practical difficulties because the endorsement mechanism through the DTA Service Procurement Form applies only to DTA-to-SEZ supplies. It does not apply to transactions between SEZ entities.

Waystar argued that documents such as letters of approval, eligibility certificates, invoices and declarations should be sufficient to establish that the services were used for authorised operations.

It sought rulings on whether documentary evidence could establish authorised operations for DTA-to-SEZ supplies without endorsement, whether endorsement was mandatory for intra-SEZ supplies, and whether zero-rated treatment could still be available where endorsement was unavailable despite services being used for authorised operations.

For Applicant: Shri Meet Jadawala, Chartered Accountant