ORDER

Heard Sri A.Kumar, learned counsel for petitioner and Dr.Thushara James, learned Government Pleader for respondents.

2. The petitioner prays for the following reliefs:

i) to issue a writ of certiorari calling for the records leading to the issuance of Exhibit P3 and quash the same to the extent it mulcts the petitioner with liability of remitting @ 18% IGST;

ii) to issue a writ of mandamus or any other writ, direction or order, directing respondents 1 and 2 to accept the purchase value to be remitted by the petitioner as shown in Ext.P3, less the amount in Ext.P3 demanded towards IGST @ 18%, and to confirm the purchase and forthwith supply the sandalwood purchased by the petitioner;

iii) to grant such other reliefs as this Hon’ble Court may deem fit in the circumstances of this case.”

3. The petitioner is the proprietrix of an industrial unit in Madras Export Processing Zone. Madras Export Processing Zone is a notified Special Economic Zone earmarked for 100% export industrial units. The industrial unit of petitioner is manufacturing natural and essential oils, nutraceuticals, oleoresins, food supplements, aromatic chemicals etc. for supply to perfumeries, pharmaceuticals, cosmetics and detergent companies. On 22.5.2018 respondent Nos.1 and 2 issued e-auction notice for sale of sandal wood from Govt. Sandal Depot, Marayoor. Eauction is conducted subject to the sale conditions published in Kerala Gazette No.2, Volume IV dated 13.1.2015 vide notification No.Pro-(4) 54954/14 dated 23.12.2014 of the Additional Principal Chief Conservator of Forests (Protection) Thiruvananthapuram read with the general conditions set out in vide Kerala Gazette No.36, Volume III dated 16.09.2014 vide notification No.Pro-(4) 29243/2013 dated 21.8.2014, Kerala Gazette No.43, Volume III dated 4.11.2014 read with notification No.Pro(4) 29243/13 dated 17.10.2014. The petitioner is one of the tenderers in e-auction notice dated 22.5.2018. The petitioner in the e-auction held on 4.7.2018 and 5.7.2018 is the successful bidder for Lot No.198/18 of 315.00 kgs. of class X sandal wood. On 13.7.2018, the auction was confirmed in favour of petitioner. The petitioner was called upon through Ext.P3 to comply with the conditions of sale and pay the sale value and taxes. Ext.P3 reads as follows:

To

Smt.Lalitha Muralidharan,

Sai Lalith Fragrance, B-25,

Phase II, Mepzsez,

Tambaram,

Chennai 600 045

Sir,

Sub: Sandalwood E-Auction sale held on 4.7.2018 & 5.7.2018 intimation of Part of Sale value and Taxes of lots -Reg.

Ref: Confirmation Order No.MSTC/BLR/18-19/1230 dated 13.7.2018 of MSTC Ltd.

The sale of sandalwood is confirmed (1 lot) in your name in four auctions as per the reference cited above. You are requested to transfer the 35% sale value, FDT and GST for the sandalwood e-Auction dated 4.7.2018 and 5.7.2018 within 7 days from the confirmation order date (13.7.2018) in the bank Account of Forest Range Officer, Marayoor and intimate this office before 21.7.2018. The 35% amount, FDT and GST details given below.

E-Auction No.8958/18-19

Ref. No.	Particulars	Amount (RS.)
A	Total sale value of sandalwood	31,59,450
B	Part of sale value 35%	11,05,808
	Less : EMD	50,000
C	Balance 35% sale value	10,55,808
D	FDT at 5% (B)	55,290
E	IGST at 18% (B + C)	2,08,998
	Total (C+D+E+F)	13,20,096

3.1 The petitioner, keeping in view its location of business and place of final supply of goods, requested the second respondent to clarifying on payment of IGST at 18% on sale price. The petitioner has addressed a similar letter to 3rd respondent and the 3rd respondent through Ext.P6 replied to the queries raised by the petitioner. The replies to the clarification sought by petitioner are given by the third respondent, are excerpted for immediate reference and read thus:

“With reference to your letter cited, it is informed that

1. Supply of goods by any supplier in India to a unit located in Special Economic Zone is Deemed Export.

2. As per Section 10(a) of the IGST Act, 2017, if the supplier and recipient are situated in different States will be treated as interstate supply ie. IGST transaction.

3. As per Section 8(1)(i) supply to SEZ even within State is considered as IGST transaction.

4. Any supply of Goods or Services by a supplier located in India to a unit located within SEZ zone is exempt from IGST as such supplies of goods or services are treated as Exports. (emphasis added)

5. The supplier has an option of supplying goods without charging 18% IGST by submitting a letter of undertaking to their jurisdictional CGST/SGST authorities, or supplier can supply the goods on payment of IGST, and thereafter claim refund of IGST paid.

3.2 According to petitioner, de hors clarification in Ext.P6, the first and the second respondents insisted upon paying 18% IGST on the goods purchased by the petitioner in the e-auction held on 4.7.2018 as confirmed on 13.7.2018. The petitioner contends that the demand of IGST is illegal and unauthorised. Hence the writ petition.

3.3 The case of petitioner is that petitioner is located in a notified Special Economic Zone. Purchase of goods by a dealer located beyond the territorial limits of State of Kerala comes as interstate purchase of goods. The Integrated Goods and Services Act, 2017 (for short ‘IGST’) was introduced to make provision for levy and collection of tax by the Central Government on interstate supply of goods or services or both ,and for matters connected therewith or incidental thereto. Section 5 of IGST Act deals with levy and collection of tax; Section 6 deals with the power to grant exemption from the levy of IGST. Section 7(5)(b) deals with interstate supply of goods and that supply of goods or services or both to or by a Special Economic Zone developer or Special Economic Zone unit shall be treated to be a supply of goods or services or both in the course of interstate trade or commerce.

3.4 According to Section 10(1)(a) of the IGST Act, the place of supply of goods where the supply involves movement of goods, whether by the supplier or the recipient or by any other person the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. In the instant case the goods are purchased by the petitioner for delivery at the industrial unit of petitioner in Special Economic Zone. Therefore purchase by petitioner is appreciated for purpose of taxation by the end movement of goods, but not where the goods are received by petitioner at Govt. Sandal Depot, Marayoor.

3.5 Section 16 deals with zero rated supply. According to Section 16(1)(b) zero rated supply of goods or services or both, means

A) on export of goods or services of both or

B) on supply of goods or services or both to a special economic zone developer or a special economic zone unit.

(emphasis added)

3.6 Section 16(3) stipulates that a registered person making zero rated supply shall be eligible to claim refund under either of the following options, viz.

a) He may supply 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 integrated tax and claim refund of unutilized input tax credit, or

b) He may supply goods or services or both subject to such conditions, safeguards and procedures, as may be prescribed on payment of integrated tax and the claim refund of such tax paid on goods or services or both supplied.

3.7 Therefore petitioner contends that the demand of 18% IGST for the subject sale by respondents 1 and 2 is illegal and hence prays that the demand of IGST at 18% from petitioner is liable to be set aside.

4. First respondent filed statement for himself and on behalf of second respondent. The first and the second respondents do not dispute dates and events referred to above. The case of respondents 1 and 2 is that firstly the e-auction notified vide Kerala Gazette dated 22.5.2018 refers to general and special conditions which are binding in the conduct and confirmation of sale. The special and general conditions of e-auction are appended as Annexures R1(a) to R1(c) to the statement. In fact the parties are not at issue on the conditions of e-auction notification dated 22.5.2018. This Court is of the view that for disposing of the writ petitions reference to all these conditions in the judgment is unnecessary except condition No.14, which reads as follows:

“The successful bidder should remit the payments as per the following manner:

(i) 35% of the bid value, after adjusting E.M.D. already remitted, shall be paid within 7 working days of issuance of acceptance letter.

(ii) Balance value along with applicable VAT, FDT and other taxes if any is to be made within 40 days in case of hard woods and within 15 days in case of softwood from the date of issuance of acceptance letter.”

4.2 The case of respondents therefore is that the petitioner is required to pay 35% of sale price, forest development tax and VAT within seven days of confirmation of the bid. The petitioner has not paid the amount as required by Condition No.14. The sale of sandal wood is completed within the State of Kerala, i.e. offer, acceptance, receipt of consideration and delivery of goods, i.e. at Marayoor Depot. The instant sale of sandal wood cannot be considered as interstate supply. The stand of respondents 1 and 2 has sufficient clarity is explained in Ext.P4. According to the tenor of Ext.P6 reply given by the third respondent to the petitioner the sale if is treated as IGST the petitioner is required to pay 18%. Respondents 1 and 2 do not dispute the scheme of IGST but contend that zero rate of tax under IGST Act arises if the delivery is effected with in SEZ. The GST regime since is destination based tax, place of delivery of goods assumes great importance. Noted from the above perspective in the case on hand, upon confirmation of sale, payment of sale consideration the goods is delivered at Govt. Sandal Depot, Marayoor but not in SEZ and therefore, the transaction, firstly, is intra state and even if it is inter state the delivery since is completed within Kerala, the petitioner is liable to pay IGST at 18%. The respondents refer to and rely on the judgment of this Court in W.A.No.2665 of 2015 dated 14.6.2017, between the parties herein. The respondents pray for dismissing the writ petition.

WPC No.41418 of 2018

5. The petitioner prays for the following reliefs:

i) to issue a writ of certiorari calling for the records leading to the issuance of Ext.P16 and quash the same;

ii) to issue a writ of mandamus or any other writ, direction or order directing respondents 1 to 3 to permit the petitioner to remit the balance sale consideration deducting the amount demanded towards IGST and forthwith supply the sandalwood purchased by the petitioner;

iii) to issue a writ of mandamus or any other writ, direction or order directing respondents 1 to 3 not to adjust the remittance made by the petitioner towards any loss/cost incurred by the department;

And

iv) to grant such other reliefs as this Honourable Court may deem fit in the circumstances of this case.”

5.1 The present writ petition is an offshoot of non-compliance with the condition stipulated by respondents while confirming the sale on 13.7.2018. The circumstances leading to the writ petition have been stated in sufficient detail in the preceding paragraphs. Therefore, for brevity, these circumstances are not stated once again. Ext.P16 dated 13.7.2018 confirms sale in favour of petitioner. The petitioner submits that first and foremost when the substantive issue is sub judice in Writ Petition No.24675 of 2018, the respondents ought not to have cancelled the sale already confirmed on 13.7.2018. The petitioner, to show her preparedness, deposited substantial amount, is always ready and willing to comply with the conditions of sale provided the subject supply is zero rated or not liable to 18% tax. It is stated that even as late as 19.11.2018 in Ext.P15 the petitioner agreed to pay the amount without GST and take delivery of the consignment. The first and second respondents have unnecessarily raked up the controversy of payment of tax.

6. Mr.A.Kumar contends that e-auction notice dated 22.5.2018 refers to statutory obligations arising under Kerala Value Added Tax and Central Sales Tax regimes. With the implementation of GST & IGST, the levy and demand of tax under these two enactments had undergone dynamic changes. Therefore, the right now claimed by petitioner is traceable to the scheme under GST & IGST Acts. Firstly, the adjudication in W.A.No.2665 of 2015 could not be treated as a binding precedent against petitioner on any of the reliefs claimed under IGST. Petitioner’s obligation to pay tax is determined by construing and interpreting the applicable provisions in GST and IGST vis-à-vis petitioner and the effect of transaction. Place of business, location of Business, House, place to which the goods are transported etc. are not disputed by first and second respondents. The petitioner is an industrial unit in SEZ and is entitled to zero percent tax for the purchases made by the petitioner unit. He refers to Section 2(86) of CGST Act which deals with place of supply. Section 2(64) defines intrastate supply of goods to have the same meaning assigned to intrastate supply of goods in section 8 of IGST Act. Section 7 defines interstate supply and Section 8 intrastate supply. Sections 7 and 8 come under Chapter IV of IGST Act, the caption of Chapter IV reads “determination of nature of supply”. He places strong reliance on Section 7, Sub-section 5, clause (b) and contends that the supply which satisfies the ingredients of Section 7(5)(b) shall be treated as supply of goods or services or both in the course of interstate trade or commerce. He lays emphasis on supply of goods/services or both to a Special Economic Zone Developer or a Special Economic Zone unit and argues that even if the e-auction is conducted with the conditions notified prior to the implementation of CGST and IGST, respondents 1 and 2, while finalising the sale, are required to implement the law i.e. CGST/IGST which is in force as on date. By referring to proviso to Section 8, he contends that the proviso explicitly excludes the supply to or by SEZ unit has not falling within the meaning of intrastate supply. He contends that respondents 1 and 2 do not have locus to determine the tax liability but it is for third respondent to answer on the tax liability of the subject sale transaction. Ext.P6 in unequivocal terms states that for movement of inter state goods without paying tax. According to him, the subject transaction shall be treated as zero rated supply, and for the said purpose he refers to Section 2(23) and Section 16 of IGST Act. According to him, the petitioner/purchaser satisfies the applicable definitions of place of business, place of supply and is admittedly located in SEZ, outside the State of Kerala follows the procedure under Rule 87 read with Rule 96A(6). In other words, the sale of sandal wood by respondents 1 and 2 is treated as an export and not liable for tax.

7. The petitioner contends that the petitioner participated in eauction conducted on 4.7.2018 and 5.7.2018 and the sale was confirmed on 13.7.2018 for ₹ 31,59,450/-. The demand of IGST @18%, the petitioner approached the Joint Commissioner and subsequently this Court by WPC No.24675 of 2018 granted an interim order to make part payment excluding the IGST. The petitioner was asked to pay the balance amount by Ext.P14 which was received only on the last day the petitioner was directed to pay. This Court permitted the petitioner to remit the balance amount less GST and kept in abeyance further proceedings. The order was later extended. The petitioner remitted the entire balance amount less GST. Hence the petitioner prays for setting aside Ext.P16 and permit the petitioner to take the goods.

8. Dr.Thushara James submits that the petitioner regularly participates in e-auction and purchases sandal wood in the auction conducted by the forest department, and is aware of the procedure followed by the respondents upon confirmation of sale. According to her, the petitioner upon knowing all the terms and conditions including condition No.14 which is excerpted above participated in the e-auction and petitioner ought to comply with the agreed conditions. The petitioner is the successful bidder of Lot No.198/18 of 315.00 kgs. of class X sandal wood in the e-auction held on 4.7.2018 and 5.7.2018. On 13.7.2018, the auction was confirmed in favour of petitioner. The petitioner upon confirmation required to pay 35% of sale consideration together with forest department tax and though the condition applicable is CGST at 18%, instead objections are raised. The petitioner, after being the successful tenderer, cannot and could not be allowed to raise objections on the applicable conditions of e-auction. The sale process from the beginning till the completion happens within the State of Kerala. The supply of goods is completed at Govt. Sandal Depot, Marayoor. So the sale is completed within the State. The petitioner has to pay IGST and thereafter claim refund from the department. Replying to contents in Ext.P6, she states that even if the subject sale transaction is treated as one coming under IGST, the supplier has an option of supplying goods without charging 18% IGST by submitting a letter of undertaking to the jurisdiction CGST/SGST charges or supplier can supply the goods on payment of IGST and thereafter claim refund of IGST paid. The supplier/respondents 1 and 2, therefore, rightly insisted upon payment of 18% tax. She submits that even by legal fiction the meaning of ‘export’ is extended to supply of goods to SEZ. Such legal fiction of export is available, if the delivery is actually made in SEZ. In other words, according to her, the sale is concluded in SEZ. According to her, in the instant sale of goods actual delivery of goods i.e. in Government Sandal Depot, by supplier assumes great importance. The petitioner pays tax and then lifts the goods for onward movement. The Government Pleader relies on Ext.R1(d) W.A. Judgment to contend that the delivery is at Marayoor Sandal Depot is held as intra state transfer. Respondents rely on Ext.P16 which according to them is self explanatory and they are justified in cancelling the sale in Ext.P3. Lastly it is argued that default of performance of argued conditions warranted cancellation of sale confirmation dt. 13.7.2018 in Ext.P3 and for valid and just reasons cancellation in Ext.P16 (WPC No.41418 of 2018) has been made and no exception within the scope of judicial review under Article 226 of Constitution of India has been made. She prays for dismissing the writ petitions.

9. In these circumstances, the following points are framed for consideration:

(a) Whether the supply of goods pursuant to confirmation of sale on 13.07.2018 in favour of petitioner is an inter-State supply or intra-State supply

(b) Whether respondents 1 and 2 are legally justified in levying and demanding 18% IGST on the sale price from the petitioner for completing the sale.

9.1 The petitioner firstly contends that the provisions of IGST are attracted to the subject supply of goods. Secondly, the petitioner is an industrial unit established and being operated in a notified Special Economic Zone (SEZ). Therefore the petitioner cannot be called upon to pay tax under CGST/IGST. The petitioner contends that condition 14 in conditions appended to e-auction notification dated 22.05.2018 firstly does not take note of change of tax regime from Value Added Tax  (VAT) to Goods and Services Tax (GST). Condition 14 will have to be applied by reference to the existing laws i.e. GST/IGST. The supply of goods by the supplier upon receipt of sale consideration from petitioner will have to be appreciated in the background of, firstly, Section 2(86) of CGST read with Chapter V of IGST Act. Secondly Section 2(64) read with Chapter VIII of IGST Act but not by reference to the conditions in e-auction notification dated 22.05.2018. The parties, even if enter into a condition contrary to what is explicitly stated by law, it is the law that is applied to the transaction but not the terms agreed between the parties which do not synthesis with existing law. According to petitioner, condition 14 is not the sole guiding factor for deciding whether the subject supply of goods attracts the service tax component or not. The legal application of the expressions ‘place of business’, ‘place of receipt’ etc to supply to petitioner takes the transaction outside the territorial limits of State of Kerala and Section 16 of IGST Act is attracted. Therefore, it is contended that the levy or demand of GST/IGST is illegal and unauthorized.

10. The respondents put forward three objections to the writ prayers. The first and foremost objection is that in W.A. No. 2665 of 2015 this Court held that supply to an SEZ attracts incidence of tax as delivery of goods is completed by seller to buyer in the State. Secondly, the transaction from the beginning till the end is completed within the State of Kerala. Thirdly, under GST regime destination based tax is implemented and the place of delivery of goods assumes importance and in the case on hand the delivery of goods is at Marayoor Depot, State of Kerala.

11. I prefer to first examine the effect of the judgment of this Court in W.A. No.2665 of 2015. The petitioner in W.P.(C) No.21530 of 2015 prayed for the following reliefs:

“(i) a declaration that sale effected to a unit in Special Economic Zone established under the Special Economic Zone Act, 2005 by any dealer in the domestic tariff area is an export sale and no Value Added Tax can be levied or collected by the respondents in respect of such sale.

(ii) a writ of Certiorari or any other writ, order or direction, quashing Exhibits P9, P10, P14, P16 and P19 in so far as it demand sale tax on the sale of sandalwood to the petitioner treating the transaction between the petitioner and respondents 2 to 4 as a local sale taxable under Section 6 (1) of the Kerala Value Added Tax Act, as the demand and collection of sale tax being illegal, unjust and violative of Article 286 of the Constitution of India and provisions of the Special Economic Zone Act, 2005, Central Sales Tax Act, 1956 and Kerala Value Added Tax Act, 2003.

(iii) a writ of Mandamus or any other writ, order or direction, directing the respondents to reimburse the amount paid by the petitioner to satisfy the illegal demand of the sale tax by the respondents and evidence by Exhibits P11 and P12 value added tax clearance certificate issued by the Forest Range Officer, Marayoor with interest at bank lending rate.

(iv) A writ of prohibition or any other writ, direction or order restraining the respondents from demanding or collecting value added tax on any sale made by them to the petitioner, being a unit in Special Economic Zone.

(v) to issue such other writ, order or direction which this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”

12. The writ petition was dismissed vide judgment dated 03.11.2015. The petitioner carried the matter in appeal and a Division Bench of this Court on 14.06.2017 dismissed W.A. No.2665 of 2015. The operative portion of the judgment reads thus:

“The mandatory requirement to satisfy KVAT is stated under Clause 14 (a) (v) as well; when it says that prevalent rate of KVAT (at present 14.5%) will be applicable to all successful bidders irrespective of destination of transportation of materials and purpose. Having participated in the bid without placing any rider or protest, it is no more open for the appellant to disown the liability, taking a “u turn” after becoming successful in the bid. It is also very relevant to note that the appellant had not chosen to challenge any of the above specific conditions with reference to the status/purpose/nature of transaction sought to be made after issuance of Exts. P5/P6 notification; despite the fact that the auction sale took place only after ’40 days’ from the date of publication of Ext. P5 notification. No such challenge is ever raised even after the sale, in the present writ petition/writ appeal as well.

30. The issue can be approached from another angle as well. Unlike the case of goods brought into the DFS [Duty Free Shop] situated in an International Airport and sold to the customers, the goods in the instant case (Sandalwood) exclusively belong to Forest Department/State. It is open for the owner of the goods to stipulate the terms for sale of the goods of the owner, to the extent it is within the four walls of law. Apart from the revenue to be obtained towards the value of the property to the State/Forest Department, the State is also entitled to get appropriate extent of tax as well, as in any other instance of sale, if covered by any taxable event. The sale conditions were specifically laid down so as to protect the interest of the State/Department in all respects and it was accepting such terms that the appellant had participated in the bid. The terms of the ‘e-auction’ notification and the special conditions by way of Exts. P5/P6 clearly indicated that it was nothing but a ‘local sale’. Having purchased the goods by participating in such sale and having effected the entire payment in terms of the Tender notification/Special conditions and having taken delivery of the goods from the godown of the State/Department in Kerala, the subsequent conduct of the appellant/bidder, whether he wanted to sell it within the State of Kerala or intended to take it from this State to some other place or whether he wanted to effect some export of the product manufactured by making use of the timber/Sandalwood purchased from the Department, is of no consequence. The sale is complete in the State of Kerala and by virtue of the terms notified, agreed and accepted, it was exigible to tax under the KVAT Act, which is not a legally or factually forbidden fruit. In the said circumstances, this Court is of the firm view that the challenge raised by the appellant against the verdict passed by the learned single Judge is devoid of any merit. Interference is declined and the Writ Appeal is dismissed.”

(emphasis applied)

13. Perusal of Writ Appeal judgment shows that the issues taken up for consideration in the said judgment are in the background of KVAT Act, vis-à-vis the conditions stipulated in the e-auction notice issued by the respondents and the incidence of tax on a completed transaction in the State of Kerala under KVAT. Had the very same tax regime i.e. KVAT been implemented as on date, the contentions now raised by petitioner are not re-agitated. The said judgment could be relied on by the respondents to show that once the conditions of sale are complied with by the buyer, goods supplied from Forest Department Marayoor, the sale is presumed to have been completed within State of Kerala under KVAT. The difficulty the respondents have in taking this contention beyond the finding recorded by the Division Bench is that with effect from 01.07.2017 GST regime is implemented in the place of KVAT and CST. The subject e-auction notice was issued on 22.05.2018 and the transaction is governed by law in force as on date. Therefore, the case of petitioner ought not to be decided by following the judgment in W.A. No.2665 of 2015 but by appreciating the applicable provisions of CGST/IGST.

14. This Court examines and applies the effect of a few provisions referred to and relied on by the petitioner to contend that contrary to the requirement of payment of 18% tax, the goods can be transported without the burden of duty/tax from Marayoor Depot to Madras SEZ for final utilisation by the petitioner. Treatment of inter-state and international supplies of goods and services is one of the most crucial elements of the design of a Dual GST regime. The approach under GST regime prescribes a set of rules for defining the place of taxation or place of supply. Now a supply is taxable in a given jurisdiction only if the supply is considered to take place in that jurisdiction. The basic principle behind provisions relating to place of supply is that GST is destination based tax. Therefore, tax is finally payable where goods and services are consumed. It is admitted that the supply of goods is to an SEZ Unit.

15. Section 2 (85) and (86)¹ of CGST, define place of business and place of supply. Place of business includes

a) a place from where the business is ordinarily carried on including a warehouse, a godown, a place where a taxable person stores his goods

b) a place where the books are maintained by the taxable person

c) a place where the business is carried on through an agent.

16. The case attracts the first and foremost of the definition and then the place of business of petitioner is in Madras Special Economic Zone, Madras.

17. Section 2(86) deals with what constitutes place of supply of goods or services. According to Sec.2(86), place of supply means place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act, 2017.

18. Chapter IV deals with determination of nature of supply i.e. inter-state import/export including supplies to SEZ. According to Section 7(1)² the supply of goods where the section of the supplier and the place of supply are in two different states, such supply is treated as supply of goods in the course of inter state trade or commence attracting incidence of tax under Section 5(1) of IGST with change of permutation/combination in State/Union Territories and Union Territories/Union Territories the incidence of IGST is attracted. Section 7(5)³ deals supply of goods/services or both to or by a Special Economic Zone developer or a Special Economic Zone Unit as inter-state supply of goods/services in the course of inter state trade or commerce. A reading of Section 7(5) of IGST Act shows thus: Supply of goods or services or both – When the supplier is located in India and the place of supply is outside India it is treated as inter-State trade or commerce. The supply of goods or services or both to or by a SEZ developer or the SEZ unit shall be treated to be a supply of goods in the course of inter- State trade or commerce. Section 7(5) deals with supply to SEZ and treats supply as a supply in the course of inter-State trade or commerce. Section 8(1)⁴ deals with intra state supply and proviso to Section 8 holds that supply of goods to or by a SEZ developer or SEZ unit shall not be treated as intra state supply. In other words the supplier and the purchaser if is located within the State and goods are supplied to one of them satisfying SEZ supply requirement, such supply is not covered by the meaning of intra state. Section 8 states that subject to the provisions of Section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union Territory shall be treated as intra-State supply. The presumption of that transaction being an intra-State sale is effaced by proviso when the supply of goods to or by a SEZ developer or a SEZ unit takes place. In other words, even if the transaction is within the State of Kerala, if the transaction originates from SEZ or terminates in SEZ, still it is not treated as intra-State transaction. Section 7(1) and Section 8(1) operate subject to section 10 of IGST.

19. Chapter V of IGST Act is captioned as Place of Supply of Goods or Services or Both. The Statute provides for determining what is the place of supply of goods or services or both. According to Section 10(1)⁵ of IGST Act the place of supply of goods shall be in cases where the supply involves movement of goods whether by the supplier or recipient i.e. recipient of goods, or by any other person, i.e. transport by road/rail etc.; place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery movement of goods terminates for delivery to the recipient. Section 10(1)(b) to (e) are not applicable and hence are not adverted to. Therefore, from the above, assuming that the goods upon payment of sale price are handed over to petitioner at Marayoor Depot, such delivery of good is for onward movement to Madras SEZ in State of Tamil Nadu. The definition and the substantive provisions in the applicable Statute that is binding between the parties but not the inference respondents 1 and 2 draw on the alleged completed transaction at Marayoor. The place of supply of goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. Therefore, as rightly contended by petitioner that the acceptance of delivery of sandal wood logs at Government Forest Department, Marayoor, is not the conclusive circumstance for deciding the place of supply of goods in the present regime of GST. Mr. Kumar does not dispute the circumstance that the petitioner upon completion of other sale conditions receives the sandal wood logs at Marayoor Forest Department depot, and the acknowledgment of goods at Marayoor Forest Department Depot does not result in termination of movement of goods but results in further movement of goods at the hands of recipient to SEZ. So the final destination i.e. SEZ in the case on hand is the supply point. The actual place of supply by plain interpretation of Section 10(1) is within the SEZ in Madras, State of Tamilnadu, but not in State of Kerala. Therefore, the contention of respondents 1 and 2 that supply of goods is completed at Marayoor Forest Department and subject sets is an intra state transaction is unsustainable. The second objection canvassed by respondents 1 and 2 on place of supply is rejected for the above reasons.

20. The next argument between the parties is on the impugned levy and demand of 18% IGST on sale price of goods purchased through Ext.P6. The petitioners claims that the petitioner is not under legally obligated to pay 18% IGST and secondly the law enables movement of goods to SEZ unit without the burden of tax on the goods purchased by 100% exporter. The petitioner’s place of business is in a notified SEZ, the movement of goods terminates in SEZ and the goods should be allowed to pass through without paying 18% IGST. The instant purchase merits zero-rated tax and the petitioner can’t be directed to pay tax to respondent. The argument of respondents is that the petitioner can pay the tax, claim refund in accordance with law. The petitioner has the option to pay tax and get refund from the department. The objections taken against zero rated tax are already stated in the preliminary paragraphs of this judgment and for avoiding repetition the same objections are not once again stated. The assessee to this legal ground is dependent on Sections 2(23) and 16(3).

21. Section 2(23⁶) of IGST Act defines: ‘zero-rated supply’ shall have the meaning assigned to it in Section 16. Chapter VII of IGST is captioned as ‘Zero Rated Supply’ and Section 16⁷ deals with: ‘zero rated supply’. According to Section 16(1) export of goods or services or both are “zero rated supply”. The word export of goods according to section 2(5) of IGST means taking goods out of India to a place outside India. The recipient of goods can move/transport the goods without paying applicable IGST. The next category is covered by Section 16(1)(b), i.e. the supply of goods or services to a SEZ developer or a special Economic Zone Unit. Section 16(2) enables taking credit of input tax on zero rated supplies, however subject to Section 17(5) of CGST Act. Section 16(3) deals with refund under two circumstances. (a) when goods are supplied under bond or letter of undertaking etc., (b) a registered person may supply goods subject to such conditions, etc. on payment of interpreted tax and claim refund in accordance with section 54⁸ of CGST Act or the Rules made thereunder. IGST defines what is ‘zero-rated tax’, and under what circumstances zero-rated tax is applicable and the manner of undertaking transactions with no incidence of tax liability on the recipient. From the above analysis, it is sufficiently clear that the argument of petitioner that it is zero rate tax transaction is completely supported by the combined reading of provisions considered above. Statute allows movement of goods without payment of tax which is again intended for the special treatment given to SEZ developer or SEZ unit, cannot be frustrated through the factual interpretation based on concluded transaction at Marayoor by the respondents. Hence it is for the parties to the transaction falling under Section 16 of IGST Act to follow one or the other options statutorily provided. It is contextual to observe that exports are priority of any country. The goods and services exported, burden of taxes are not exported with the goods and services exported. The reason is simple i.e., to make the exports internationally competitive and earn foreign exchange to the country. Export incentives are impermissible under WTO. However, goods and services can be relieved from the burden of domestic taxes. Under the scheme of IGST supplies to SEZ unit and SEZ developer are treated at par with physical exports. The exporting units to compete with world market need raw materials without payment of taxes and duties. Either the denial of zero-rated tax benefit by respondents or calling upon the petitioner to pay 18% tax and claim refund is not in line with statutory scheme discussed above. Respondents 1 & 2 by calling upon petitioner to pay 18% IGST are acting contrary to the scheme under IGST. Misuse is one of the gray areas in implementation of zero-rated tax. Respondent No.3 has informed that if the supplier and recipient are situated in different States the transaction is treated IGST transaction. Intra-State movement of goods culminating delivery to the recipient in SEZ comes under IGST. To the same effect is supply of goods or services to a SEZ in any other State in India. The Act provides for safeguards against suppression or evasion of applicable tax.

Rule 87⁹ of CGST Rule.

Rule 96A¹⁰ of CGST.

22. The point is answered in favour of the petitioner and against the respondents.

23. It is stated by both the counsel that the outcome of W.P.(C) No. 41418 of 2018 is dependent on the outcome of W.P.(C) No.24675 of 2018. The point of law in dispute between the parties is decided by this judgment in favour of petitioner. Therefore, there ought not to be further hassles in enabling movement of subject goods from Government Sandal Depot, Marayoor to SEZ. The petitioner through Ext.P16 has reported her willingness to comply with the conditions except deposit tax and take delivery of goods. This statement shows that the petitioner has been ready and willing to perform her obligations under the sale confirmation letter dated 14.07.2018.

24. The applicable provisions have been considered in extenso. Therefore the conclusion is that the subject supply comes as inter-State movement of goods to SEZ outside the State of Kerala. The first and second respondents though have proceeded to conduct e-auction by reference to applicable VAT, the same is understood as applicable taxes i.e., GST/IGST, and the transaction is concluded or completed by the parties with reference to the legal obligations under GST/IGST.

25. Keeping in view the above discussion the writ petitions are ordered as follows:

a) In the circumstances noted supra it is held that the subject transaction shall be treated as zero-rated tax supply.

b) The petitioner is given four weeks from today to comply with the conditions which the petitioner is under obligation to comply with except deposit of 18% tax IGST and communicate to 1st and 2^nd respondents with a request to deliver the goods.

c) The petitioner with a view to ensuring that the goods purchased are not diverted or movement of goods results in tax evasion to the State in any manner is directed to comply with all the statutory obligation in this behalf for movement of goods without IGST.

d) Respondents 1 and 2 are directed to deliver subsequent sandal wood to the petitioner within one week from the date of communication received from petitioner.

———

¹ 2(85) “place of business” includes–– (a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or (b) a place where a taxable person maintains his books of account; or (c) a place where a taxable person is engaged in business through an agent, by whatever name called;

2(86) “place of supply” means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act;

² 7. (1) Subject to the provisions of section 10, supply of goods, where the location of the supplier and the place of supply are in–– (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of goods in the course of inter-State trade or commerce.

³ 7. (5) Supply of goods or services or both,–– (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

⁴ 8. (1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra- State supply: Provided that the following supply of goods shall not be treated as intra-State supply, namely:–– (i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods imported into the territory of India till they cross the customs frontiers of India; or (iii) supplies made to a tourist referred to in section 15.

⁵ 10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,–– (a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient; (b) where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person; (c) where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; (d) where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly; (e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board.

⁶ 2.(23) “zero-rated supply” shall have the meaning assigned to it in section 16;

⁷ 16. (1) “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.

(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–– (a) he may supply 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 integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.

⁸ 54. (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed.

(2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than–– (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.

(4) The application shall be accompanied by- (a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and (b) such documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person:

Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person.

(5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57.

(6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant.

(7) The proper officer shall issue the order under sub-section (5) within sixty days from the date of receipt of application complete in all respects.

(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies; (b) refund of unutilised input tax credit under sub-section (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify.

(9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance with the provisions of sub-section (8).

(10) Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may- (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Explanation.––For the purposes of this sub-section, the expression “specified date” shall mean the last date for filing an appeal under this Act.

(11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

(12) Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as a result of the appeal or further proceedings he becomes entitled to refund.

(13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39.

(14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.

Explanation.-For the purposes of this section,–– (1) “refund” includes refund of tax paid on zerorated supplies of goods or services or both or on inputs or input services used in making such zerorated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3).

(2) “relevant date” means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods, (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier; or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished; (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of–– (i) receipt of payment in convertible foreign exchange, where the supply of services had been completed prior to the receipt of such payment; or (ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; (e) in the case of refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises; (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax.

⁹ 87. Electronic Cash Ledger.- (1) The electronic cash ledger under sub-section (1) of section 49 shall be maintained in FORM GST PMT-05 for each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for crediting the amount deposited and debiting the payment therefrom towards tax, interest, penalty, fee or any other amount.

(2) Any person, or a person on his behalf, shall generate a challan in FORM GST PMT-06 on the common portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other amount:

Provided that the challan in FORM GST PMT-06 generated at the common portal shall be valid for a period of fifteen days.

(3) The deposit under sub-rule (2) shall be made through any of the following modes, namely:-

(i) Internet Banking through authorised banks;

(ii) Credit card or Debit card through the authorised bank;

(iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or

(iv) Over the Counter payment through authorised banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft:

Provided that the restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter payment shall not apply to deposit to be made by –

(a) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in this behalf;

(b) Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties;

(c) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque or demand draft during any investigation or enforcement activity or any adhoc deposit:

Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international money transfer through Society for Worldwide Interbank Financial Telecommunication payment network, from the date to be notified by the Board.

Explanation.– For the purposes of this sub-rule, it is hereby clarified that for making payment of any amount indicated in the challan, the commission, if any, payable in respect of such payment shall be borne by the person making such payment.

(4) Any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a temporary identification number generated through the common portal.

(5) Where the payment is made by way of National Electronic Fund Transfer or Real Time Gross Settlement mode from any bank, the mandate form shall be generated along with the challan on the common portal and the same shall be submitted to the bank from where the payment is to be made:

Provided that the mandate form shall be valid for a period of fifteen days from the date of generation of challan.

(6) On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number shall be generated by the collecting bank and the same shall be indicated in the challan.

(7) On receipt of the Challan Identification Number from the collecting bank, the said amount shall be credited to the electronic cash ledger of the person on whose behalf the deposit has been made and the common portal shall make available a receipt to this effect.

(8) Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited but no Challan Identification Number is generated or generated but not communicated to the common portal, the said person may represent electronically in FORM GST PMT-07 through the common portal to the bank or electronic gateway through which the deposit was initiated.

(9) Any amount deducted under section 51 or collected under section 52 and  claimed by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledger.

(10) Where a person has claimed refund of any amount from the electronic cash ledger, the said amount shall be debited to the electronic cash ledger.

(11) If the refund so claimed is rejected, either fully or partly, the amount debited under sub-rule (10), to the extent of rejection, shall be credited to the electronic cash ledger by the proper officer by an order made in FORM GST PMT-03.

(12) A registered person shall, upon noticing any discrepancy in his electronic cash ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.

Explanation 1.- The refund shall be deemed to be rejected if the appeal is finally rejected.

Explanation 2.– For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal.

(13) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.

¹⁰ Rule 96A: Export of goods or services under bond or Letter of Undertaking (Chapter-X: Refund)

(1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of-

(a) fifteen days after the expiry of three months, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the goods are not exported out of India; or

(b) fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange or in Indian rupees, wherever permitted by the Reserve Bank of India.

(2) The details of the export invoices contained in FORM GSTR-1 furnished on the common portal shall be electronically transmitted to the system designated by Customs and a confirmation that the goods covered by the said invoices have been exported out of India shall be electronically transmitted to the common portal from the said system.

Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended in exercise of the powers conferred under section 37 of the Act, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically by the common portal to the system designated by the Customs:

Provided further that the information in Table 6A furnished under the first proviso shall be auto-drafted in FORM GSTR-1 for the said tax period.

(3) Where the goods are not exported within the time specified in sub-rule (1) and the registered person fails to pay the amount mentioned in the said sub-rule, the export as allowed under bond or Letter of Undertaking shall be withdrawn forthwith and the said amount shall be recovered from the registered person in accordance with the provisions of section 79.

(4) The export as allowed under bond or Letter of Undertaking withdrawn in terms of sub-rule (3) shall be restored immediately when the registered person pays the amount due.

(5) The Board, by way of notification, may specify the conditions and safeguards under which a Letter of Undertaking may be furnished in place of a bond.

(6) The provisions of sub rule (1) shall apply, mutatis mutandis, in respect of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit without payment of integrated tax.