Government’s decisions on various proposals given by SEZs and EOUs

by | May 26, 2020 | Insight

This is in furtherance of our earlier update NITYA’s Insight | Issue 117| Relaxation of using existing pre-printed packing materials or wrappers shared vide trailing mail regarding rejection of various proposals of exporters by the Government. Recently, the Government again took decisions on various suggestions of Special Economic Zones units (‘SEZs’) or Export Oriented Units (‘EOUs’).


We have tabulated key proposals of SEZs and EOUs and decisions of the Government, as under:


S. No.




Providing immediate input GST refund to DTA suppliers for supplies to SEZs

No specific instance was provided where refund is pending for more than 6 months. Further, the Government initiated a special drive to expedite pending Customs and GST refunds in the month of April 2020. Basis this, it was again reiterated that all pending refund claims will be processed at the earliest



Providing facility of loans against pending GST refunds with interest being borne by the Government


No basis or framework was provided for the same. It was suggested that a concept paper may be provided for examination


Providing exemption from GST on foreign currency conversion charges


Proposal for reducing or eliminating GST on foreign currency conversion charges was sent to JS (TRU-1) for examination



Providing ab-initio exemption from payment of GST on procurements by EOUs

Exemption from payment of GST on imports was provided till March 31, 2021. Further, domestic procurement has been categorized as deemed export supplies and either supplier or EOU can claim refund of GST paid on such supplies. As the process of refund has been made hassle free, there is no need to provide upfront exemption



Providing exemption from payment of GST on services rendered or consumed in FTWZ to maintain the spirit of not exporting the taxes considering the international practices

FTWZ provides warehousing and other allied services like labelling, packing etc. to foreign suppliers and place of supply of such services is location of performance of services. Accordingly, these services do not qualify as export of services and GST is applicable. It was suggested that requisite inputs on international practices, can be provided for further examination



Providing clarity on disbursement of duty drawback on goods supplied from DTA to FTWZ in case payment is made directly by foreign customer to DTA supplier instead of foreign currency account of FTWZ


Unlike SEZs, it is not feasible for FTWZ to pay DTA supplier from their foreign currency account. Rather, payment is made directly by foreign customer to DTA supplier. It was suggested that a separate proposal can be sent for examination for allowing duty drawback in such cases


Providing extension in validity of e-way bill due to restricted movement within the country

The Government has already extended the validity of e-way bill expired between March 20, 2020 and April 15, 2020 till April 30, 2020


NITYA Comments: The validity of e-way bill expiring between the abovementioned period has already been extended till May 31, 2020 



Releasing export or import shipments from ports, held up due to lockdown

The Government has already waived off late fee for delay in filing Bill of Entry. Further, requirement of submitting bond has been temporarily dispensed off. Several other measures have already been undertaken for speedy custom clearance during lockdown



(Refer No. K-43022/7/2020-SEZ (3145523) dated May 15, 2020 by Department of Commerce, Ministry of Commerce and Industry)