Hello Dear Reader, with multiple queries from Tally user regarding Proper Export & SEZ Entry in Tally, here I am Presenting article which will clarify the concept of SEZ and Export Supply process in Tally along with that it will guide you step by step process to book correct method of entry in Tally for EXPORT and SEZ Supply.
First we need to understand the concept of topic and why it is important to discuss. Here we will discuss two different topics with similar configuration process in Tally.

1. Sales Made to Foreign Country (Export Sales)
2. Sales Made to SEZ Unit

Export and SEZ Sales Report GSTR1

First we will see supply of Goods or Service under Export Sales.

Export Sales refers to supply of Goods or Services from Indian soil to any foreign country. If a regular GST dealer supply any kind of goods or service to foreign client then it may be Taxable or exempt depending on certain case.
Export Supply may be Taxable if regular dealer have not opted for LUT or Bond.
LUT refers to letter of Undertaking which is kind of guarantee note issue by Bank or other recognized authority which allows dealer to not to pay any Tax in case of supply made under Export.

The bond is a debt security, under which the issuer owes the holders a debt and (depending on the terms of the bond) is obliged to pay them interest (the coupon) or to repay the principal at a later date, termed the maturity date. In case of GST if dealer has have invested a portion of total turnover in to government project then Government can issue letter of Bond to dealer which will help dealer to not to pay any GST on export supply.

To promote Export activity Government of India has exempted Export sales under GST with some terms and condition as discussed above. In case a registered dealer sale to foreign client then generally he is liable to pay GST to government as IGST but if he has opted for LUT or Bond then he will not be liable to pay GST on such supply.

Example :- ABC Info India Pvt Ltd and Indian Supplier made sales to KBK Star LLC USA an USA based buyer as $10000 @ 68 Rs /US$ = 6,80,000 INR.
Now assume in above case If Indian supplier who have not have opted for LUT or Bond then supply goods to USA buyer will attract IGST so total value of Invoice would be as = 6,80,000 + 18% GST =  8,02,400 INR

Now if Supplier raised Invoice to USA buyer stating Invoice value + IGST on Supply then USA Buyer will refuse to pay IGST on such supply hence Indian supplier will be forced to raise 2 separate Invoice one as Commercial Invoice and second as Tax Invoice for same transaction.
Commercial Invoice will be given to USA buyer and Tax Invoice for the purpose to pay Tax on Supply and Tax on Such supply will be incurred by Indian Supplier which can be refunded after applying for refund on portal.

In above case if Indian supplier have opted for LUT or BOND then he do not have to raise two separate kind of Invoice for same transaction. Supply of goods in presence of LUT or Bond will be fully exempted from GST liability.
Now Lets discuss Supply of Goods or Services to SEZ unit
SEZ unit is a Special Economic Zone mentioned by government authority to promote business and industries.
Supply made to SEZ unit can be Taxable or Exempted like Export Sales depending on LUT or BOND. If a normal GST holder supply any goods or service to SEZ unit buyer then Supplier will be liable to Pay Tax on such Invoice value which will be born by supplier himself because buyer will not pay GST on Invoice value.

Example :- KRK Enterprises (Mumbai)supplied some goods to Vardhmaan India Pvt Ltd who is located in SEZ unit (Mumbai) for Rs 50,000 hence while raising Invoice KRK will raise Invoice as 50,000 Rs + 18% GST = 59,000 Rs. But if KRK submit such invoice to Vardhman then Vardhaman will not pay GST amount and KRK will born GST amount from which will be refunded later on after applying for return.

In case KRK have opted for LUT or Bond then no need to pay GST on such supply and there will not headache to apply to refund of Tax paid on such supply.

Summary: - In short we can say if supply made SEZ unit or under export sales then it may be taxable or nontaxable depending on scenario of LUT or Bond. In case if registered supplier have not opted for BOND or LUT then initially Tax amount on such supply will be incurred by himself and can be claimed later on. Amount of Tax paid on export or SEZ supply is kind of current assets for supplier as those amount will be refunded by government after successful application of refund. Application of refund can be done online or offline or both which may take some months to done.

In case if supplier have opted for LUT or Bond then it will smoother the process to supply under SEZ or Export as there won’t be any GST liability or no process to fill application for refund.

Now it is important to book such transaction in correct way in Tally or else it will not included in your GST Report under proper head.

I have explained detail scenario in both case form configuration to GST report in Tally. I will recommend you to click here todownload PDF file for the same.

For any query or assistance needed feel free to text me or mail on contact details.
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Regards,
Parvez Ansari