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CA Final · Indirect Tax Laws · Import and Export Under GST

Himalaya Pharma Ltd supplies goods to an SEZ unit as zero-rated supply without payment of integrated tax and has not furnished any bond or LUT. Which statement about the provisions of Rule 96A is correct?

A bond or LUT must be furnished before supplying to the SEZ unit without paying integrated tax. Rule 96A(6) extends sub-rule (1) mutatis mutandis to zero-rated supplies to both an SEZ developer and an SEZ unit, so Himalaya's supply without any bond or LUT does not comply.

  1. ARule 96A(1) applies mutatis mutandis, so a bond or LUT must be furnished before the supply is made without payment of integrated taxCorrect
  2. BRule 96A applies only to exports out of India and not to supplies to an SEZ
  3. CA bond is needed only if the SEZ unit is a developer, not a unit
  4. DThe bond is furnished after the supply, within fifteen days of the invoice

Explanation

Rule 96A(6) applies sub-rule (1) mutatis mutandis to zero-rated supplies to an SEZ developer or SEZ unit without payment of integrated tax. Rule 96A(1) requires the bond or LUT prior to the supply, so Himalaya has not complied. Option C is wrong because both developer and unit are covered.

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