Export Invoice › Invoice to an SEZ unit

Making an invoice to an SEZ unit or developer

Supplies to Special Economic Zones are zero-rated like exports, but the buyer is in India and has a GSTIN. That mix causes most mistakes on SEZ invoices.

The rules in short

• Choose SEZ supply with IGST paid or SEZ supply under LUT/bond (no IGST) in the maker.
• Always IGST, never CGST + SGST, even if the SEZ is in your own state.
• The SEZ unit's or developer's GSTIN goes in the buyer's details; the place of supply is the SEZ's state.
• The same Rule 46 endorsement as for exports is printed.
• The supply must be for the SEZ's authorised operations; the SEZ buyer usually gives you its endorsement or approval list.

Worked example

A Mohali IT firm (Punjab, 03) bills software services to an SEZ unit in Mohali for ₹2,00,000 with IGST at 18%. Although both are in Punjab: IGST ₹36,000, total ₹2,36,000, endorsement "on payment of integrated tax". Under LUT it would be ₹2,00,000 with 0% IGST and the "under bond or letter of undertaking" endorsement.

Mistakes to avoid

• Charging CGST + SGST because the SEZ is in the same state.
• Reporting it as a normal B2B sale in GSTR-1 instead of as an SEZ supply.
• Using SEZWOP in the e-invoice while charging IGST on the invoice, or the other way round.
• Exporting or billing under LUT without a valid LUT for that financial year.