Reverse charge mechanism— In the instant case, the present appeal has been filed by M/s. Portescap India Private Limited against the Advance Ruling pronounced by the Maharashtra Authority for Advance Ruling.

The Appellant are inter alia engaged in manufacturing of customized motors in India. As the Appellant is an SEZ Unit, it is engaged in exports of the manufactured goods outside India.

The Appellant procures Rental Services from “Santacruz Electronics Export Processing Zone” SEZ Authority, situated at SEEPZ service centre building, Andheri East, Mumbai-400096, which is a Local authority having GSTIN 27AAALS4995G1ZH. Additionally, other services like Advocate Services and Gate Pass Services from SEEPZ are being procured wherein GST is presently being discharged by the Appellant under the Reverse Charge Mechanism.

As per the Notification No. 18/2017 - Integrated Tax (Rate) dated 05.07.2017, the Central Government exempts services imported by a unit or a developer in the Special Economic Zone for authorized operations, from the whole of the integrated tax leviable thereon under section 5 of the Integrated Goods and Service Tax Act, 2017.

The Appellant had filed an application, seeking a ruling on the following questions:- 

(i) Whether an SEZ unit is required to comply with the reverse charge mechanism as a service recipient for local/domestic renting of immovable property services procured by the unit from SEEPZ Special Economic Zone Authority (Local Authority) in accordance with Notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017 read with Notification No. 03/2018 - Central Tax (Rate) dated25.01.2018?

(ii) Whether an SEZ unit is required to pay tax under reverse charge mechanism on any other services in accordance with Notification No. 13/2017 - Central Tax (Rate dated 28.06.2017 read with Notification No. 03/2018 - Central Tax (Rate) dated 25.01.2018?

The advance ruling authority had rejected the Application as being non- maintainable by citing the provision of secction 95 (a) of the CGST Act, 2017, which provides for the meaning of Advance Ruling.

Held that— 

(i) that the Appellant are not required to pay GST under RCM on the impugned services of renting of immovable property services received from SEEPZ SEZ for carrying out the authorised operation in SEZ subject to furnishing of LUT or bond as a deemed supplier of such services;

(ii) that the Appellant are not required to pay GST under RCM on any other services received from the suppliers located in DTA for carrying out the authorized operation in SEZ subject to furnishing of LUT or bond as a deemed supplier of such services.