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GST Refund on SEZ Supplies (Section 16 IGST + Rule 89(2)(f))

Reviewed by CA & CS Team · Patron Accounting LLP ICAI & ICSI Registered| 15+ Years Experience| Last Updated: 11 May 2026 Verify Credentials →

Documents: Tax invoice, LOA copy, Specified Officer endorsement, GSTR-1 Table 6B, GSTR-3B Table 3.1(b).

Fees: Starts at Rs 8,000 per RFD-01 cycle plus 18 percent GST; success fee 1 to 3 percent on recovery.

Eligibility: DTA supplier registered under GST making zero-rated supply to SEZ unit or developer for Authorised Operations.

Timeline: 30 to 60 days for RFD-01 sanction; 90 percent provisional in 7 days for low-risk filings.

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Real Stories from Real People

Hear how teams across industries use Patron to save time, cut costs, & stay in control.

“

We had 18 invoices stuck across 2024 and 2025 to a Hyderabad pharma SEZ unit. Endorsements were all missing. Patron coordinated fresh DSPF submissions, mapped each invoice to LOA Authorised Services, secured Specified Officer endorsement in 22 days, and filed fresh RFD-01s. RFD-06 sanctioned within 41 days - Rs 2.1 crore recovered.

Vivek Kapoor

CFO, Mumbai Pharma DTA Supplier

★★★★★

2 months ago

“

Authorised Officer at the Hyderabad SEZ kept refusing our IT facility management invoices saying the service was not in LOA. Patron's LOA Annex re-mapping showed facility management fell under broader IT enabled support category. Endorsement came through in 2 weeks; Rs 38 lakh refund credited within 45 days of RFD-01.

Suresh Reddy

Director, Pune IT Services DTA

★★★★★

3 months ago

“

RFD-08 SCN challenged our Rule 89(2)(f) declaration alleging IGST was built into pricing. Patron showed LUT-route invoice with zero IGST, GSTR-3B Table 3.1(b) zero-rated reporting, and SEZ unit confirmation letter. Officer accepted - Rs 67 lakh refund sanctioned. Litigation defence without going to Section 107.

Nikhil Bhatia

CFO, Noida Engineering DTA

★★★★★

1 month ago

“

DSPF was stuck pending for 3 months at the Chennai SEZ. Patron escalated to the Development Commissioner with Section 11 SEZ Act framework, got endorsement within 10 days, and filed RFD-01. Section 56 interest claimed from Day 61 of original RFD-02. Combined recovery of Rs 84 lakh including interest.

Anand Thakkar

Finance Head, Chennai Biotech DTA

★★★★★

4 months ago

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From pharma, IT, engineering, biotech, electronics, and gems and jewellery DTA suppliers feeding SEZ units in Hyderabad, Pune, Mumbai, Chennai, Bengaluru, and Noida - we handle 200+ SEZ refund cycles annually with deep Specified Officer liaison capability.

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Overview What Is SEZ Refund Eligible Claimants Our Services 8-Step Pipeline Documents Fees Timeline Benefits SEZ vs Goods vs Service FAQs

Overview

📌 TL;DR - SEZ Supplies Services at a Glance

Supplies made by a Domestic Tariff Area (DTA) supplier to a Special Economic Zone (SEZ) unit or developer are zero-rated under Section 16(1)(b) of the IGST Act 2017. The DTA supplier (not the SEZ unit) claims refund of either accumulated ITC under LUT route (Rule 89) or IGST paid under IGST-paid route. Specified Officer endorsement under Rule 89(1) second proviso plus Rule 89(2)(f) declaration that tax has not been collected from SEZ are mandatory.

Quick Reference	Details
Governing Provision	Section 16(1)(b) and 16(3) of IGST Act 2017 read with Rule 89 of CGST Rules 2017 and Section 26 of SEZ Act 2005
Who Claims	DTA supplier (not the SEZ unit) - SEZ unit is the recipient and exempt from tax under Section 26 SEZ Act
Filing Form	Form GST RFD-01 with Statement 4 (IGST-paid) or Statement 5 (LUT route)
Key Documentary Requirement	Specified Officer endorsement on tax invoice via SEZ Online DSPF for services; admission certificate for goods; Rule 89(2)(f) declaration
Time Limit	2 years from relevant date under Section 54(1) of CGST Act 2017
Authorised Operations Linkage	Mandatory - supply must be used for SEZ unit's Authorised Operations as per LOA
Authority	Specified Officer / Authorised Officer (SEZ); DSPF on sezonline-ndml.com; GST jurisdictional officer for RFD-01

SEZ supply refund is the most documentation-heavy GST refund category. Section 26 of the SEZ Act 2005 exempts SEZ units and developers from payment of any duties or taxes on goods or services procured from the Domestic Tariff Area for Authorised Operations. The GST regime implements this by treating supplies to SEZ units and developers as zero-rated under Section 16(1)(b) of the IGST Act 2017 - the DTA supplier raises a zero-tax invoice (LUT route) or pays IGST and claims refund (IGST-paid route). Either way, the DTA supplier - not the SEZ unit - is the claimant.

The substantive gate that distinguishes SEZ refund from goods or service exports is the Specified Officer endorsement requirement under the second proviso to Rule 89(1) of CGST Rules 2017 read with Rule 30 of SEZ Rules 2006. For supplies of goods, the goods must be admitted in full into the SEZ for Authorised Operations as endorsed by the Specified Officer. For supplies of services, evidence of receipt of services for Authorised Operations must be obtained from the Specified Officer. Since October 2023, the SEZ Online portal's DTA Service Procurement Form (DSPF) module enables electronic endorsement for services. Patron Accounting LLP files, defends, and recovers SEZ supply refunds for 200+ DTA suppliers across IT, pharma, engineering, biotech, gems and jewellery, and electronics.

Content is reviewed quarterly for accuracy.

What Is GST Refund on SEZ Supplies?

GST refund on SEZ supplies is the refund mechanism by which a Domestic Tariff Area (DTA) supplier recovers the GST that would otherwise stick as cost on supplies made to a Special Economic Zone (SEZ) unit or developer. Section 16(1)(b) of the IGST Act 2017 categorises supplies to SEZ units and developers as zero-rated supply, and Section 16(3) gives the DTA supplier two refund routes - export under LUT or bond without payment of IGST and claim refund of accumulated ITC under Rule 89, or charge IGST on the invoice and claim refund of tax paid via Form RFD-01.

The structural anchor is Section 26 of the Special Economic Zones Act 2005, which exempts SEZ units and developers from payment of any duties or taxes on goods or services procured from the DTA, provided the procurement is for Authorised Operations as defined in the LOA (Letter of Approval) issued by the SEZ Development Commissioner. Rule 30 of the SEZ Rules 2006 prescribes the documentation requirement, including the Specified Officer endorsement. Rule 89(1) second proviso of CGST Rules 2017 mirrors this requirement on the GST refund side, and Rule 89(2)(e) and 89(2)(f) prescribe the specific evidentiary documents and declarations required in Form RFD-01.

Specified Officer endorsement workflow - goods vs services:

Supply Type	Endorsement Path	Statutory Hook
Goods Supplied to SEZ	Bill of Entry filed on SEZ Online; Specified Officer endorses admission of goods in full into the SEZ for Authorised Operations	Rule 89(1)(a) second proviso + Rule 30 SEZ Rules 2006
Services Supplied to SEZ	DSPF (DTA Service Procurement Form) on SEZ Online - live since October 2023; SEZ unit uploads invoice details, maps to LOA Authorised Services, AO/SO electronically endorses	Rule 89(1)(b) second proviso + Rule 89(2)(e)
Goods + Services Bundle	Apply Section 8 IGST Act principal supply test; endorsement required for service component via DSPF; goods component via admission certificate	Section 8 IGST + Rule 89(1) second proviso

Key Terms for SEZ Supplies:

SEZ (Special Economic Zone): Geographically defined duty-free enclave under SEZ Act 2005 treated as foreign territory for trade and tariff purposes.
DTA (Domestic Tariff Area): Whole of India outside SEZs and Free Trade Warehousing Zones - the source of supplies into SEZ.
SEZ Unit / Developer: Unit set up in an SEZ for manufacturing or service activity / entity that develops the SEZ infrastructure.
LOA (Letter of Approval): Approval letter issued by SEZ Development Commissioner specifying the Authorised Operations the unit is permitted to undertake.
Authorised Operations: Operations specified in LOA - supply must be linked to these to qualify for zero-rated treatment under Section 16(1)(b).
Specified Officer (SEZ): Authority defined under SEZ Rules 2006 Rule 2 - endorses receipt of goods or services for Authorised Operations.
Authorised Officer (SEZ): Same as Specified Officer for GST refund purposes per Explanation to Rule 89(1) of CGST Rules 2017.
DSPF (DTA Service Procurement Form): Module on SEZ Online portal for electronic submission and Specified Officer endorsement of service invoices to SEZ. Live since October 2023.
Zero-Rated Supply (Section 16 IGST): Exports and SEZ supplies; tax at 0 percent with full ITC eligibility and refund.
Rule 89(2)(e): Statement of invoices with endorsement evidence required for service supplies to SEZ.
Rule 89(2)(f): Mandatory declaration in Annexure 2 of RFD-01 - supplier declares tax has not been collected from SEZ unit or developer.
Section 26 of SEZ Act 2005: Statutory tax exemption for SEZ units and developers on goods or services from DTA for Authorised Operations.

Section 16(1)(b) SEZ Zero-Rated Refund

Eligible Claimants - Who Files and When

The most common confusion in SEZ refund is who claims - the DTA supplier or the SEZ unit. The answer is structural - the DTA supplier files RFD-01 because the SEZ unit is exempt from paying GST under Section 26 of SEZ Act 2005 and therefore has no GST refund entitlement on inputs from DTA.

Eligible claimants - DTA suppliers:

Scenario	Verdict
DTA Manufacturer Supplying Goods to SEZ Unit	PASSES under Section 16(1)(b); requires goods admission endorsement by Specified Officer under Rule 89(1) second proviso(a)
DTA Service Provider Supplying Services to SEZ Unit	PASSES under Section 16(1)(b); requires DSPF endorsement on SEZ Online for each invoice
DTA Service Provider Supplying Services to SEZ Developer	PASSES under Section 16(1)(b); same DSPF route
DTA Supplier of Goods + Services Bundle	Apply Section 8 IGST Act principal supply test; endorsement required for the service component

Not eligible - common misconceptions:

Ineligible Scenario	Reason
SEZ Unit Itself	SEZ unit is the recipient and exempt under Section 26 SEZ Act 2005 - no refund entitlement on procurement
DTA-to-DTA Sale That Transits SEZ Warehouse	Free Trade Warehousing Zone (FTWZ) traders selling to DTA - not zero-rated
Supply Not Linked to Authorised Operations	If the supply is for non-LOA-listed activities (canteen, employee transport), refund denied even if SEZ-located
Goods Not Admitted in Full to SEZ	If only partial admission, only the admitted portion qualifies for refund
IGST Already Refunded Through Customs Route	Cannot double-claim under Rule 96 and Rule 89

For the upstream RFD-01 filing mechanics, see GST RFD-01 filing step-by-step covering the 11-Statement matrix. For service exports under Section 2(6) IGST (different from SEZ), see GST refund service exports. For inverted duty structure refund (a different Section 54 category common in manufacturing), see GST refund inverted duty structure.

Patron Accounting Services for SEZ Supply Refund

Service	What We Do
LOA-to-Invoice Authorised Operations Mapping	Free 30-minute review of SEZ customer's LOA against the DTA supplier's invoice line items to confirm Authorised Operations linkage. Documented memo for officer reference. Free
DSPF Endorsement Coordination on SEZ Online	End-to-end coordination with SEZ unit's procurement team and Specified/Authorised Officer for DSPF submission, LOA mapping, payment proof, LUT verification, follow-up till endorsement acknowledgement reaches DTA. Included
Form GST RFD-01 End-to-End Filing	Online RFD-01 filing under LUT route (Statement 5) or IGST-paid route (Statement 4). Declarations under Rule 89(2)(e), 89(2)(f), 89(2)(l), 89(2)(m); CA certificate above Rs 2 lakh. Included
Rule 89(4) Computation for SEZ Turnover	Net ITC of inputs and input services; Adjusted Total Turnover; SEZ supply turnover segregation; CA-certified worksheet. Included
Endorsement Gap Recovery (Past 2 Financial Years)	Audit past 2 FYs of SEZ supplies under Section 54(1) limitation. Identify invoices where endorsement is missing. Coordinate fresh DSPF, secure endorsement, file fresh RFD-01. Success-fee model. Recovery Project
Rule 89(2)(f) Declaration + Litigation Defence	Mandatory declaration drafting and substantiation; defends against RFD-08 SCN where officer alleges tax was collected; Section 107 / 109 appeal preparation. Add-on
RFD-08 SCN Response With Hearing	Show Cause Notice reply within 15 days; documentary defence pack citing CBIC Circular 48/22/2018-GST; personal hearing representation. Add-on
Specified Officer Escalation to Development Commissioner	Where DSPF stuck or endorsement refused - written representation under Section 11 SEZ Act 2005 to Development Commissioner. Add-on

Our Process

8-Step SEZ Supply Refund Pipeline

Patron Accounting's SEZ supply refund pipeline runs the eight sequential stages below. Each step cites the relevant Act, Section, Rule, Form, or Circular for traceability.

Step 1

LOA Verification and Authorised Operations Mapping

Obtain copy of SEZ unit's Letter of Approval (LOA). Map each invoice line item to a specific Authorised Operation listed in the LOA. Without this mapping, Specified Officer endorsement will be denied. Patron documents the mapping in a memo for officer reference.

LOA Annex mappedEach invoice line tagged

Mapping Done 01

Step 2

Route Selection - LUT (Rule 89) vs IGST-Paid

LUT route - supply to SEZ without IGST under Form RFD-11 (Rule 96A); claim refund of accumulated ITC under Rule 89. IGST-paid route - charge IGST on invoice; claim refund of tax paid via RFD-01. LUT preferred where ITC accumulation is significant; IGST-paid preferred for small refund amounts.

Statement 5 (LUT) or Statement 4Cash-flow optimised

Route Selected 02

Step 3

Invoice Issuance and e-Invoice Reporting

Raise tax invoice with SEZ unit GSTIN (deemed inter-state supply). Report on IRP if turnover above Rs 5 crore for IRN and QR code. Mark invoice as Supply to SEZ Without Payment of Tax (LUT) or Supply to SEZ With Payment of Tax.

e-Invoice with IRN/QRMarked SEZ supply

Invoice Raised 03

Step 4

Endorsement - Goods Admission OR DSPF Service Endorsement

For goods: SEZ unit files Bill of Entry on SEZ Online; Specified Officer endorses admission for Authorised Operations. For services: SEZ unit submits DSPF on SEZ Online with invoice details mapped to LOA Authorised Services; AO or SO endorses electronically; acknowledgement sent to DTA supplier email.

DSPF acknowledgement (services)Admission certificate (goods)

Endorsed 04

Step 5

GSTR-1 Table 6B + GSTR-3B Reconciliation

Report SEZ invoices in GSTR-1 Table 6B (Supplies to SEZ With Payment of Tax) or Table 6B flagged as Without Payment for LUT route. Confirm GSTR-3B Table 3.1(b) - Outward Taxable Supplies (Zero-Rated) - matches Table 6B.

Table 6B vs 3.1(b) matchedMismatch prevented

GSTRs Aligned 05

Step 6

Rule 89(4) Computation - Statement 4 or Statement 5

Maximum Refund under Rule 89(4) = (Turnover of Zero-Rated SEZ Supply x Net ITC) divided by Adjusted Total Turnover. Statement 4 for SEZ supplies with IGST payment; Statement 5 for SEZ supplies without IGST (LUT). CA-certified worksheet.

Rule 89(4) formula appliedCA-certified worksheet

Formula Computed 06

Step 7

Form GST RFD-01 Online Filing With Annexures

Login to GST portal, navigate Services > Refunds > Application for Refund. Upload Statement 4 or 5, endorsement evidence, declarations under Rule 89(2)(e), 89(2)(f) (tax not collected from SEZ), 89(2)(l), 89(2)(m), CA certificate above Rs 2 lakh. Submit and capture ARN.

All declarations attachedARN captured

ARN Generated 07

Step 8

RFD-02, Provisional Sanction, Final Sanction

RFD-02 acknowledgement within 15 days under Rule 90(2). Risk-based system identification under amended Rule 91(2). For low-risk filings, 90 percent provisional refund via RFD-04 within 7 days under CGST Instruction 6/2025. Final sanction RFD-06 within 60 days of RFD-02.

RFD-04 90% in 7 daysRFD-06 final in 60 days

Refund Credited 08

Document Checklist for SEZ Supply Refund

Keep the following documents ready before filing each SEZ supply refund cycle. Patron Accounting maintains a digital document vault per client tracking invoice-to-endorsement chain.

Mandatory documents (for every SEZ supply refund):

Letter of Approval (LOA) of SEZ unit or developer with Authorised Operations and Authorised Services listing.
Tax invoice (e-invoice with IRN and QR code if turnover above Rs 5 crore) marked as Supply to SEZ With or Without Payment of Tax.
Specified Officer or Authorised Officer endorsement - admission certificate for goods OR DSPF acknowledgement for services.
GSTR-1 Table 6B with SEZ invoice details for the refund period.
GSTR-3B Table 3.1(b) showing zero-rated supplies for the refund period.
Form RFD-11 (LUT) reference number for LUT route filings.
Statement 4 (IGST-paid) or Statement 5 (LUT) with invoice details.
Declaration under Rule 89(2)(e) - statement of invoices and endorsement evidence.
Declaration under Rule 89(2)(f) - tax has not been collected from SEZ unit or developer (Annexure 2 of RFD-01).
Declaration under Rule 89(2)(l) - applicant has not been prosecuted.
Declaration under Rule 89(2)(m) - no other refund claim under any other provision.

Conditional documents (above Rs 2 lakh):

CA or Cost Accountant certificate on unjust enrichment under Section 54(8) read with Rule 89(2)(m).
Computation sheet with HSN-wise rate map.
Bank statement evidencing IGST paid on outward supplies (IGST-paid route only).
Reconciliation between GSTR-3B Net ITC and books of account.

For disputed or litigated cases:

MoU or service agreement with SEZ unit explicitly covering Authorised Operations.
SEZ unit's confirmation letter that supply was used for Authorised Operations.
Bill of Entry (for goods) showing admission into SEZ in full.
Customs export-equivalent documentation where required.

Common Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Specified Officer Endorsement Delayed or Refused	Most common rejection trigger. Officers refuse endorsement where payment is not yet made by SEZ unit (despite Rule 89 not requiring this), where invoice does not match LOA-listed service exactly, or where physical invoice copy is not produced. Patron coordinates 3-step escalation - re-submission with corrected LOA mapping, representation to Authorised Officer, escalation to Development Commissioner under Section 11 SEZ Act.
Authorised Operations Linkage Disputed	Officer rules that the supply (canteen services, transport, employee welfare) is not for Authorised Operations and refuses endorsement. Patron analyses LOA Annex carefully, identifies the broader Authorised Service category (facility management) under which the supply may legitimately fall, and re-submits with covering note.
Rule 89(2)(f) Declaration Challenged - Tax Was Collected Alleged	Officer reads invoice as having IGST element built into pricing and alleges tax was collected from SEZ. Patron demonstrates LUT route (zero IGST on invoice), provides GSTR-3B Table 3.1(b) evidence of zero-rated treatment, and produces SEZ unit confirmation that no IGST element was built into pricing.
DSPF Module Not Functioning or Endorsement Stuck	DSPF technical issues, AO or SO unavailable, or endorsement stuck in pending state. Patron coordinates with SEZ Online helpdesk (NDML), files written representation to the Specified Officer with cc to Development Commissioner, and uses Section 11 of SEZ Act 2005 fast-tracking provisions where applicable.
e-Invoicing Dual Reporting Burden	Same invoice has to be reported on IRP (for IRN and QR) and again on SEZ Online DSPF. Officers sometimes question why physical invoice differs from IRN data (currency conversion timing, rounding). Patron generates IRP-aligned PDF with IRN reference and uses it as primary endorsement document.
Endorsement Received But RFD-08 SCN Issued	GST officer questions endorsement validity, alleges Authorised Operations not satisfied, or rejects on Rule 89(2)(f) grounds. Patron drafts comprehensive reply citing CBIC Circular 48/22/2018-GST clarifying SEZ refund procedure, attaches DSPF acknowledgement, LOA Annex mapping, and SEZ unit confirmation.

Fees for SEZ Supply Refund Services

Fee Component	Amount
Government Fee (RFD-01 filing)	Nil (no statutory portal fee)
Patron Accounting Professional Fees - GST Refund Cluster	Starting from INR 4,999 (Exl GST and Govt. Charges)
Single Quarter SEZ Supply Refund (turnover up to Rs 5 crore)	Rs 8,000 per filing plus GST
Multi-Quarter / Annual SEZ Supply Refund	Rs 18,000 per filing plus GST
High-Value Annual Refund (turnover above Rs 25 crore)	Rs 35,000 per filing plus GST
DSPF Endorsement Coordination (per quarter)	Rs 12,000 standalone plus GST
Endorsement Gap Recovery (past 2 FYs)	Rs 25,000 base + Rs 1,500 per invoice plus GST
Show Cause Notice (RFD-08) Response on Rule 89(2)(f)	Rs 25,000 per response plus GST
Section 107 / 109 Appeal	Rs 50,000 to Rs 1,00,000 plus success fee
Development Commissioner Escalation	Rs 15,000 standalone plus GST
Success Fee on Refund Recovery	1 to 3 percent of refund sanctioned
All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved. Government fees are payable separately at actuals.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free SEZ Supplies consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

How Long SEZ Supply Refund Takes

Stage	Estimated Timeline
LOA verification + Authorised Operations mapping	1 to 2 working days	From data share
e-invoice generation and IRP reporting	Same day as invoice	If turnover above Rs 5 crore
DSPF submission by SEZ unit	1 to 5 working days	Depends on SEZ unit procurement cycle
Specified Officer / Authorised Officer endorsement	5 to 15 working days	Varies by SEZ zone
GSTR-1 Table 6B + GSTR-3B Table 3.1(b) filing	By 11th and 20th of following month	Monthly compliance
Rule 89(4) computation + Statement 4/5	2 to 3 working days	CA-certified worksheet
RFD-01 filing + ARN	Same day after sign-off	System-driven
RFD-02 acknowledgement	Within 15 days of RFD-01	Rule 90(2) CGST Rules
RFD-04 provisional refund (90% low-risk)	Within 7 days of RFD-02	CGST Instruction 6/2025
RFD-06 final sanction	Within 60 days of RFD-02	Section 54(7) statutory ceiling
Time limit to file under Section 54(1)	2 years from relevant date	CGST Act 2017
Interest if refund delayed beyond 60 days	6% per annum under Section 56	9% for appellate orders

                    
                    Tier 1 freshness on DSPF evolution: This page is reviewed every 3 months because the SEZ Online DSPF module is actively evolving since October 2023 launch, e-invoicing-DSPF integration is pending, and NASSCOM advocacy with Department of Commerce on endorsement bottlenecks is ongoing. Notification 13/2025-CT and 14/2025-CT amended Rule 91(2) for risk-based provisional refund effective 01.10.2025. Patron tracks every CBIC clarification, SEZ Online module update, and Department of Commerce circular for impact on SEZ supply refund eligibility.

Key Benefits

Why CA-Led SEZ Refund Filing Beats DIY or Software-Only

CA-Led LOA-to-Invoice Mapping

Software cannot read a LOA Annex. Patron's CAs map each invoice line item to a specific Authorised Operation listed in the LOA - without this mapping, Specified Officer endorsement will be denied. Critical for ambiguous services like facility management, advisory, IT enabled support.

DSPF Coordination + SEZ Unit Liaison

DSPF requires the SEZ unit to submit on its login (not the DTA supplier's). Patron coordinates with the SEZ unit's procurement team, prepares pre-mapped Excel templates, and pushes for endorsement. DTA suppliers operating alone routinely face 2-3 month delays.

Rule 89(2)(f) Declaration + Litigation Defence

The mandatory declaration in Annexure 2 of RFD-01 - tax has not been collected from SEZ - is the third most common rejection ground. Patron drafts the declaration with supporting evidence (LUT-route invoice, GSTR-3B zero-rated reporting, SEZ unit confirmation) and defends against RFD-08 SCN.

Risk Pre-Audit For 90% Provisional Path

Patron simulates the 90 percent provisional refund risk score before filing - testing GSTR-1 vs 3B match, endorsement completeness, Rule 89(2)(f) alignment, and Notification 14/2025-CT exclusions - to maximise low-risk classification under amended Rule 91(2).

Endorsement Gap Recovery (Past 2 FYs)

Many DTA suppliers have stuck invoices with missing endorsement going back 2 years. Patron audits past 2 FYs under Section 54(1) limitation, coordinates fresh DSPF submissions, secures retrospective endorsement, and files fresh RFD-01s on a success-fee model - recovering capital previously written off.

Development Commissioner Escalation Lever

Where DSPF is stuck or endorsement refused, Patron escalates under Section 11 of SEZ Act 2005 fast-tracking provisions - written representation to Development Commissioner with cc to Specified Officer. This lever is rarely used by DIY filers but routinely unlocks 2-3 month-old pending endorsements.

Trusted by DTA Suppliers Feeding SEZ Units

10,000+ Businesses | 4.9 Google Rating | 50,000+ Documents Filed | 15+ Years of GST and SEZ Compliance

Outcome proof: A Mumbai-based pharma DTA supplier recovered Rs 2.1 crore in stuck SEZ supply refunds in March 2026 covering 18 invoices to a Hyderabad pharma SEZ unit between 2024 and 2025. Original endorsements were missing; Patron coordinated fresh DSPF submissions, mapped each invoice to LOA Authorised Services, secured Specified Officer endorsement within 22 days, and filed fresh RFD-01s. RFD-06 sanctioned within 41 days.

Trusted by Hyundai, Asian Paints, Bridgestone, and 200+ DTA suppliers across IT, pharma, engineering, biotech, gems and jewellery, and electronics feeding SEZ units in Hyderabad, Pune, Mumbai, Chennai, Bengaluru, and Noida. With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves DTA suppliers feeding SEZ units across India.

SEZ Supply vs Goods Export vs Service Export - Refund Comparison

Parameter	SEZ Supply	Goods Export	Service Export
Statutory basis	Section 16(1)(b) IGST + Section 26 SEZ Act 2005	Section 16(1)(a) IGST	Section 16(1)(a) IGST + Section 2(6) IGST
Refund mechanism	Manual RFD-01 (no auto-route)	Auto via shipping bill (Rule 96)	Manual RFD-01
Special documentation	Specified Officer endorsement, LOA mapping, Rule 89(2)(f)	Shipping bill + EGM via ICEGATE	FIRC, FIRA, eBRC for forex
Time limit	2 years from relevant date (Section 54(1))	2 years from date ship or aircraft leaves India	2 years from FX receipt or invoice, whichever later
Processing time	30 to 60 days from RFD-01	7 to 15 days auto-credit	30 to 60 days from RFD-01
Common rejection trigger	Missing endorsement; Rule 89(2)(f) declaration mismatch	SB005 invoice mismatch	Section 2(6)(v) distinct person; FIRC missing
LUT requirement	Yes for LUT route (Form RFD-11)	Optional (Rule 96 IGST-paid skips LUT)	Yes for LUT route

Partner Services for DTA Suppliers Feeding SEZ

SEZ supply refund work integrates with Patron Accounting's broader GST and zero-rated supply compliance stack. DTA suppliers feeding SEZ commonly bundle the services below:

GST refund (general) - the parent practice covering Section 54 refund spectrum across all 8 refund categories.
GST RFD-01 filing step-by-step - the form whose mechanics underpin every SEZ supply refund.
GST RFD-03 deficiency response - for pre-processing deficiency memos on filed RFD-01.
GST refund service exports - for service exporters claiming refund under Section 2(6) IGST (a different zero-rated category).
GST refund inverted duty structure - accumulated ITC refund under Section 54(3)(ii) for manufacturing sectors.
GST returns filing - monthly GSTR-1 and GSTR-3B underpinning Table 6B and 3.1(b) reporting.
GST registration - for new DTA suppliers needing GSTIN before initiating any SEZ supply cycle.
GSTAT appeal for exporters - second-tier appellate route where Section 107 appeal on SEZ refund is unsuccessful.

Legal and Compliance Framework (India)

Section 16(1)(b) of IGST Act 2017: Supplies of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit are zero-rated supply. Read with Section 16(3) which gives the two refund routes.

Section 16(3) of IGST Act 2017: Registered person making zero-rated supply may supply under bond or Letter of Undertaking without IGST and claim refund of unutilised ITC, OR supply on payment of IGST and claim refund of tax paid.

Section 26 of SEZ Act 2005: Substantive exemption - SEZ unit and developer are exempt from payment of any duties or taxes on goods or services procured from DTA for Authorised Operations. The refund mechanism under GST gives effect to this exemption.

Rule 30 of SEZ Rules 2006: Procedure for procurement from DTA - prescribes the endorsement requirement on tax invoice. Sub-rule (4) covers the specific compliance.

Rule 89(1) second proviso of CGST Rules 2017: (a) For goods - refund filed only after goods admitted in full into SEZ for Authorised Operations as endorsed by Specified Officer. (b) For services - refund filed with evidence of receipt of services for Authorised Operations as endorsed by Specified Officer.

Rule 89(2)(e) of CGST Rules 2017: Statement containing number and date of invoices, evidence of endorsement, and details of payment from SEZ recipient to DTA supplier for Authorised Operations - required for service supplies to SEZ.

Rule 89(2)(f) of CGST Rules 2017: Mandatory declaration in Annexure 2 of Form GST RFD-01 - I hereby declare that tax has not been collected from the Special Economic Zone unit or the Special Economic Zone developer in respect of supply of goods or services or both covered under this refund claim.

Rule 89(4) of CGST Rules 2017: Maximum Refund Amount = (Turnover of Zero-Rated Supply x Net ITC) divided by Adjusted Total Turnover. Same formula as goods or service exports.

Section 54(1) of CGST Act 2017: 2-year time limit from relevant date. For SEZ supplies, relevant date follows the Explanation 2 categories applicable to the supply type.

Section 54(8) of CGST Act 2017: Unjust enrichment doctrine - Rule 89(2)(f) declaration that tax not collected from SEZ is the SEZ-specific manifestation of this principle.

Circular 48/22/2018-GST dated 14 June 2018: Clarification on SEZ supply refund procedure including endorsement requirements.

Notification 13/2025-CT dated 17.09.2025: Amended Rule 91(2) for risk-based provisional refund effective 01.10.2025.

CGST Instruction 6/2025 dated 03.10.2025: 90 percent provisional refund mechanism for zero-rated supplies including SEZ.

SEZ Online DSPF Module (October 2023): DTA Service Procurement Form for electronic Specified Officer endorsement of service invoices to SEZ.

e-Invoicing Mandate (01.01.2023): Mandatory IRP reporting for taxpayers above Rs 5 crore turnover; applies to SEZ supplies.

Form GST RFD-11 (LUT): Letter of Undertaking for export and SEZ supply without IGST payment - valid one financial year (1 April to 31 March).

Form GST RFD-01 with Statement 4 or Statement 5: Statement 4 for SEZ supplies With Payment of Tax; Statement 5 for SEZ supplies Without Payment of Tax (LUT route).

Government references: GST portal, SEZ Online DSPF, CBIC GST circulars, and indiacode.nic.in (CGST Act 2017, IGST Act 2017, SEZ Act 2005).

What is GST refund on SEZ supplies under Section 16 of the IGST Act?

Supplies of goods or services from a Domestic Tariff Area (DTA) supplier to a Special Economic Zone (SEZ) unit or developer are zero-rated under Section 16(1)(b) of the IGST Act 2017. The DTA supplier (not the SEZ unit) claims refund of either accumulated ITC under LUT route (Rule 89) or IGST paid under IGST-paid route (RFD-01). Section 26 of the SEZ Act 2005 provides the substantive exemption; the GST refund mechanism gives effect to it.

Who can claim refund on supplies to SEZ - the DTA supplier or the SEZ unit?

The DTA supplier files RFD-01. The SEZ unit is the recipient and is exempt from paying any duties or taxes under Section 26 of the SEZ Act 2005, so the SEZ unit has no GST refund entitlement on inputs from DTA. Per second proviso to Rule 89(1) of CGST Rules 2017, the application for refund in respect of supplies to SEZ shall be filed by the supplier of goods (after admission) or supplier of services (with endorsement).

SEZ supply ka GST refund kaise milta hai - kya documents lagte hain? (Hinglish)

DTA supplier ko Form RFD-01 file karna hota hai GST portal par. Pehle SEZ customer se Specified Officer endorsement lena hota hai - goods ke liye admission certificate, services ke liye DSPF acknowledgement on SEZ Online. Phir LOA ke Authorised Operations list ke saath invoices map karne hote hain. Statement 4 (IGST-paid route) ya Statement 5 (LUT route) banakar Rule 89(4) formula apply karke refund quantum calculate karna hota hai. Annexure 2 me Rule 89(2)(f) declaration lagani hoti hai ki tax SEZ se collect nahi kiya.

What is the role of the Specified Officer endorsement under Rule 89(1) second proviso?

The Specified Officer (or Authorised Officer) of the SEZ - defined under Rule 2 of SEZ Rules 2006 - certifies that the goods or services received from DTA are for the SEZ unit's Authorised Operations as listed in its Letter of Approval (LOA). For goods, the Specified Officer endorses admission of goods in full. For services, the Specified Officer electronically endorses the invoice via the DSPF module on SEZ Online. Without this endorsement, refund is not admissible.

How does the DSPF module on SEZ Online work?

Live since October 2023, DSPF is the electronic endorsement mechanism for service supplies. The SEZ unit logs into SEZ Online, uploads invoice details (Excel template), maps each invoice to a service in the LOA-approved Authorised Services list, attaches LUT number, payment proof, and supplier details. The form auto-routes to the Authorised Officer who either approves or refers to the Specified Officer. Once endorsed, an acknowledgement is sent to the DTA supplier's email - this is the endorsement evidence under Rule 89(2)(e).

What is the Rule 89(2)(f) declaration and when is it required?

Rule 89(2)(f) of CGST Rules 2017 requires the DTA supplier to declare in Annexure 2 of Form GST RFD-01 that tax has not been collected from the SEZ unit or developer in respect of the supplies covered under the refund claim. This declaration is the SEZ-specific manifestation of the unjust enrichment doctrine in Section 54(8) of CGST Act 2017. Required for every SEZ supply refund. Officer challenges to this declaration are the third most common rejection ground.

Is endorsement required for both goods and services supplied to SEZ?

Yes for both, but in different forms. For goods, the requirement is admission of goods in full into the SEZ for Authorised Operations as endorsed by the Specified Officer (per Rule 89(1)(a)). For services, the requirement is evidence of receipt of services for Authorised Operations as endorsed by the Specified Officer (per Rule 89(1)(b)) - this evidence is now obtained via DSPF since October 2023. Some rulings have held that for goods refund where ITC is adjusted against taxable supplies and no refund is sought, endorsement is not required.

How does Rule 30 of SEZ Rules 2006 interact with GST refund?

Rule 30 of SEZ Rules 2006 prescribes the procurement procedure for SEZ units from DTA, including the documentation and endorsement requirements. Rule 30(4) specifically deals with the endorsement compliance. Rule 30 is the SEZ-side basis; second proviso to Rule 89(1) of CGST Rules 2017 is the GST-side requirement that operationalises the endorsement for refund purposes. Both must be satisfied.

What documents are needed for SEZ supply refund under Rule 89(2)(e)?

Rule 89(2)(e) requires (1) statement containing number and date of invoices, (2) evidence regarding the endorsement specified in second proviso to Rule 89(1) - the DSPF acknowledgement for services or admission certificate for goods, (3) details of payment along with proof made by the recipient SEZ to the DTA supplier for Authorised Operations as defined under SEZ Act 2005. All three are submitted in Annexure to RFD-01.

Specified Officer endorsement nahi mil rahi - kya karein? (Hinglish)

Pehle check karein ki invoice LOA Authorised Operations ke saath map hai. Agar specific service LOA me listed nahi hai to broader category (jaise facility management ya IT enabled support) ke under fit karna possible hai. Phir SEZ unit ke procurement team ke saath coordinate karke DSPF re-submit karein with corrected mapping. Agar Authorised Officer refuse kar raha hai to Specified Officer ko written representation. Agar wahan bhi stuck hai to Section 11 SEZ Act 2005 ke under Development Commissioner ko escalate karein - yeh fast-tracking lever rarely use hota hai par effective hai.

Quick Answers

Statutory basis? Section 16(1)(b) of IGST Act 2017 + Section 26 of SEZ Act 2005.
Who files? DTA supplier (not the SEZ unit) - Form GST RFD-01.
Refund routes? LUT (Statement 5) or IGST-paid (Statement 4).
Endorsement? Specified Officer endorsement via DSPF on SEZ Online (services) or admission certificate (goods).
Declaration? Rule 89(2)(f) - tax has not been collected from SEZ (Annexure 2 of RFD-01).
Time limit? 2 years from relevant date under Section 54(1).
Authorised Operations? Mandatory linkage to LOA-listed operations - supply must be for these.
Provisional refund? 90 percent under CGST Instruction 6/2025 within 7 days for low-risk.

Statutory Deadlines That Determine Your Refund

SEZ supply refund deadlines run off Section 54(1) and the DSPF endorsement cycle. Patron tracks each milestone:

Refund time limit under Section 54(1) - 2 years from relevant date. Permanent loss of refund right if missed.
LUT renewal in Form RFD-11 - before first SEZ supply of new FY (preferably by 31 March). SEZ supplies without LUT attract IGST.
e-Invoice IRP reporting - mandatory if turnover above Rs 5 crore. Same day as invoice.
GSTR-1 Table 6B reporting - by 11th of following month. Refund processing blocked until reported.
GSTR-3B Table 3.1(b) reporting - by 20th of following month. Refund processing blocked until filed.
Specified Officer endorsement - target within 15 working days of DSPF submission. Escalation to Development Commissioner under Section 11 SEZ Act if delayed.
RFD-02 acknowledgement - within 15 days of RFD-01 (Rule 90(2)). Escalate via grievance if delayed.
RFD-04 provisional sanction - within 7 days of RFD-02 (low-risk).
RFD-06 final sanction - within 60 days of RFD-02 (Section 54(7)). 6 percent interest under Section 56 if delayed.

Get your free SEZ refund eligibility check now. Call +91 945 945 6700 or WhatsApp us. Refund quantum and endorsement gap report within 4 business hours.

Recover SEZ Supply Refunds With Endorsement Discipline

SEZ supply refund is the most documentation-heavy GST refund category. Section 26 of the SEZ Act 2005 exempts SEZ units and developers from payment of duties or taxes on goods or services procured from DTA for Authorised Operations - and the GST regime implements this through zero-rated treatment under Section 16(1)(b) of the IGST Act 2017. The DTA supplier (not the SEZ unit) claims refund via Form GST RFD-01 under LUT route (Statement 5) or IGST-paid route (Statement 4). The substantive gate is the Specified Officer endorsement requirement under the second proviso to Rule 89(1) of CGST Rules 2017 read with Rule 30 of SEZ Rules 2006.

For goods, admission certificate from Specified Officer is required. For services, the DSPF (DTA Service Procurement Form) module on SEZ Online - live since October 2023 - provides electronic endorsement. The Rule 89(2)(f) declaration that tax has not been collected from the SEZ unit is the SEZ-specific manifestation of the unjust enrichment doctrine. Patron Accounting LLP brings 15+ years of GST and SEZ compliance experience for 200+ DTA suppliers across IT, pharma, engineering, biotech, gems and jewellery, and electronics with four physical offices in Pune, Mumbai, Delhi, and Gurugram. DTA suppliers gain CA-led LOA-to-invoice mapping, DSPF endorsement coordination with the SEZ unit, Rule 89(2)(f) declaration drafting and litigation defence, endorsement gap recovery for past 2 financial years, and Development Commissioner escalation lever under Section 11 SEZ Act.

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SEZ supply refund integrates with the broader GST refund and zero-rated supply stack. Most DTA suppliers run these services in parallel for end-to-end compliance.

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Content Created: 7 May 2026 | Last Updated: 11 May 2026 | Next Review: 7 August 2026 | Reviewed By: CA & CS Team · Patron Accounting LLP

This page is reviewed every 3 months (Tier 1 freshness - SEZ Online DSPF module is actively evolving since October 2023 launch, e-invoicing-DSPF integration pending, and NASSCOM advocacy with Department of Commerce on endorsement bottlenecks ongoing). Review triggers include CBIC notifications on Rule 89, SEZ Rules amendments, DSPF module updates, and Department of Commerce circulars.