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GST Trivia

Sale to SEZ by Composition Dealer

GST draft legislation (November 2016) provides for option to certain category of dealers and manufacturers with Annual Turnover of less than Rs.50 lakhs. The tax rate proposed is not less than two and a half percent in case of a manufacturer and one percent in any other case, of the turnover in a State during the year.

However composition scheme is not available for the dealer who makes any Inter State outward supply of goods.

Section 3(6) of the IGST Act provides that Supply of goods and/ or services to or by a SEZ developer or an SEZ unit, shall be deemed to be a supply of goods and/or services in the course of inter-State trade or commerce.


In view of the restriction on effecting of Inter State sale by a dealer, is a composition dealer prohibited from effecting sale to any SEZ developer or SEZ Unit.