My query is that my client is a civil contractor and started giving service to construct the shed to Private Company in special Economic Zone. Now my query is whether that service is taxable or not? If yes then what is the procedure for application of LUT?
In GST, As per Section 16 of IGST Act, 2017, zero rated supply means any of the following supplies of goods or services or both, namely:—
(a) export of goods or services or both; or
(b) Supply of goods or services or both to a Special economic Zone developer or a Special Economic Zone unit.
A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:—
1) Supply of goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of IGST and claim refund of unutilized input tax credit; or
2) Supply of goods or services or both on payment of IGST and claim refund of such tax paid.
As per the above provisions, the supply of service stated in the query is a zero rated supply in GST.
Now if taxpayer will supply goods or services under LUT bond, then Letter of undertaking (GST-RFD-11) has to be filed /submitted online before exporting the goods/services.
Following are the steps to be followed on GST portal to furnish LUT :
1. Login to GST portal
2. Go to ‘SERVICES’ Tab > ‘User Services’ > Select ‘Furnish Letter of Undertaking(LUT)’
3. Select the financial year for which Letter of Undertaking is applied for from the ‘LUT Applied for Financial Year’ drop-down list.
4. Fill up the necessary details on the Letter of Undertaking Form/ GST RFD-11 that appears on the screen.
The following needs to be done on the form:
- Self declaration
- Give Independent Witnesses Information
5. Enter the Place of filing > Click on ‘SAVE’ > click on ‘PREVIEW’ to verify the correctness of the form before submission
6. Sign and file the form.