Comparison Between the Old & New GST Return System – Supplies from Special Economic Zone (SEZ)

Supplies from Special Economic Zone (SEZ) units/ developers located in India shall be treated as inter-state supplies. The goods supplied by SEZ unit/ developer to persons located in the Domestic Tariff Area (DTA) unit along with Bill of Entry shall be treated as imports. IGST on these goods will be charged at the time of clearance into the DTA unit. The IGST paid by DTA unit can be claimed as Input Tax Credit (ITC).

Latest Update

14th March 2020*
The new GST return system will be implemented from October 2020.
The present return filing system (GSTR-1, 2A & 3B) will continue until September 2020.
*Subject to CBIC notification

Let’s see how supplier and recipient are liable to report supplies from SEZ unit/ developer under both the old and new return system.

Under the old return filing system

The supply of goods (without Bill of Entry) and supply of services received by DTA unit from SEZ unit/ developer are to be reported by the SEZ in GSTR-1. The SEZ uni developer has to report the same in table 4A of GSTR-1 (Outward supplies other than reverse charge supplies and supplies through e-commerce operator).

The goods (with Bill of Entry) received by DTA unit from SEZ unit/ developer shall be reported by DTA unit as imports in its GSTR-2. However, GSTR-2 has been kept in abeyance under the old return system; the DTA unit has to report ITC on imports from SEZ in table 4A of GSTR-3B (ITC available – Import of goods).  

Under the new return filing system

The supply of goods (without Bill of Entry) and supply of services received by DTA unit from SEZ unit/ developer shall be reported by the SEZ unit/ developer in table 3B of GST ANX-1 (Outward supplies other than attracting reverse charge). These will be auto-populated to table 3A of GST ANX-2 of DTA unit.

The goods (with Bill of Entry) received by DTA unit from SEZ unit/ developer shall be reported by DTA unit. DTA unit has to report these supplies in table 3K of GST ANX-1 (Import of goods from SEZ units/developers on a Bill of Entry). These will be auto-populated to table 3B of GST ANX-2 of DTA unit. The reporting of supplies from SEZ unit/ developer is to be given manually until the beginning of auto-population of data from SEZ to GSTN.  

Comparison – old vs new GST return system

The reporting of supply of goods (without Bill of Entry) and supply of services by SEZ unit/ developer has shifted from GSTR-1 to GST ANX-1. The reporting of supply of goods (with Bill of Entry) by DTA unit has shifted from GSTR-3B to GST ANX-1.

Under both systems, the supplies from the SEZ units/ developers to the DTA units are to be reported invoice wise except while reporting in GSTR-3B. Under new return filing system, the SEZ unit/ developer has to additionally report the supply of goods (with Bill of Entry) in table 3D of GST RET-1 (Details of supplies having no liability).

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