Bauxite Handling Services To SEZ Held Zero-Rated | AAR

Case Details: Bauxite handling & transport services to SEZ unit held zero-rated inter-State supply u/s 16(1)(b) IGST Act: AAR

Judiciary and Counsel Details

• Harsh Vardhan & Pratima Mohanty, Member
• Prakhyat Surapaneni, C.A. for the Applicant.

Facts of the Case

The applicant was a body corporate registered under the GST Act. It had received a work order from a Special Economic Zone (SEZ) unit to provide logistics services. The services included loading, transportation, and stacking of bauxite from mines to the railway siding.The applicant contended that it was providing services in the Domestic Tariff Area, which is outside the SEZ unit. Therefore, the services provided by them were liable to tax under the GST Act.

AAR Held

The Authority for Advance Ruling (AAR) held that the supply of goods or services or both made to or by a Special Economic Zone developer or a Special Economic Zone unit shall be treated as supply of goods or services or both in the course of inter-state trade or commerce (inter-state supply). The supply of Goods or Service or both [for authorized operations] to a Special Economic Zone developer or a Special Economic Zone unit shall be treated as “Zero Rated Supply”.The service proposed to be provided to the SEZ unit will fall under Cargo Handling Service. As Bauxite forms an integral part of the manufacture of Aluminium and Ministry of Commerce has permitted Cargo Handling Service as default authorized services meant for SEZ developer or a SEZ Zone Unit, the supply in questions should qualify the definition of Zero-rated supply as per Section 16(1)(b) of the IGST Act, 2017.