Summer Internship Project:

“A Study on Financial Impact on GST Revenue Due to DTA

Service Procurement Form Compliance in SEZ”

Presented by:- Akshay Ghalme

 Objectives of SIP

 To understand the concepts of GST, SEZ, DSPF, LUT, SAC Code, and

Payment details.

 To understand the process of DSPF form filling.

 To understand the impact of SEZ (DSPF, LUT & SAC) Code on GST.
 Research Methodology:

DATA COLLECTION
• It is a descriptive type of research
• I used Secondary data to get the information for this project.
• In this project, we collected data from the Ministry of Commerce and Industry,
Government of India.
• In this, we have taken data from different years to study the export performance of
SEZs in India, India Export Destination for the year 2020-21, impact on
employment by SEZs in India and presented all this information through tables,
graphs, and charts. That will help us understand all information.
 Data Collection & Analysis:
To understand the process of DSPF form filling:
Multiple invoices produced by multiple/different DTA vendors over a month
can be uploaded at once

The essential details must be filled out on an Excel template

Invoice Specifications (Type/Date/Number/Amount)

SAC code number (Service Accounting Code)

DTA Supplier- Name, Address, IGST No., and Email-ID

 To understand the process of DSPF form filling:

SEZ must specify if the supply is subject to a bond/Letter of Undertaking

(LUT) or is subject to IGST payment.

LUT Number and LUT issued Date.

% of IGST

Invoice payment details.

Without a payment option, the Bond/ LUT details must be recorded

sent to DC Office for assessment and approval.

 To understand the process of DSPF form filling:
Sr No 1 2 3 4 5 6 7
Invoice Type
Invoice Invoice Invoice Invoice Invoice Invoice Invoice
*
Invoice F74490102 NG2122/18 F74490102 NG2122/18 F74490102 NG2122/18 2325/2017-
Number * 155 8 155 8 155 8 18
Invoice Date
*
######### 12/01/2021 11/19/2021 12/01/2021 11/19/2021 12/01/2021 08/12/2017
(MM/DD/YY
YY)
Amount in
69,300.00 4400.00 69,300.00 4400.00 69,300.00 4400.00 6101.00
INR *
SAC * 998719 998597 998719 998597 998719 998597
Maintenanc Maintenanc Maintenanc
e and e and e and
repair Landscape repair Landscape repair Landscape
Service services of care and services of care and services of care and
Description * other maintenanc other maintenanc other maintenanc
machinery e services machinery e services machinery e services
and and and
equipments equipments equipments
To understand the impact of DSPF, LUT & SAC Code on GST

What is Supply with payment of IGST?

What is Supply Under Bond?

 Impact of SEZ on IGST Revenue of the Govt. of India:
• These data are taken from the Government of India (Ministry of Finance) portal.

Revenue Impact ( in RS Crore)

Name of
Sr. No.
the Scheme 2021-22
2016-17 2017-18 2018-19 2019-20 2020-21
(Estimated)

1 SEZ 9,877 12749 17295 19,690 24,506 27,511

Other
2 67,103 65,785 58,567 63,428 55,335 21,750
Scheme

3 Total 76,980 78534 75862 69118 79,841 49,261

 Chart Title
100

90 87
84

80 77
72
70 69

60

50

40

31
30 28
23
20
16
13
10

0
2016-17 2017-18 2018-19 2019-20 2020-21

SEZ Share (In %) Linear (SEZ Share (In %)) Other Scheme (In %)
 Export Performance of SEZs in India:
• Department of Commerce (Export Promotion Council for EOUs & SEZs)
SEZ
Year
Rs. In Cr. Growth %
2010-11 3,15,868 -
2011-12 3,64,478 15.00
2012-13 4,76,159 31.00
2013-14 4,94,077 4.00
2014-15 4,63,770 -7.00
2015-16 4,67,337 1.00
2016-17 5,23,637 12.00
2017-18 5,81,033 11.00
2018-19 7,01,179 21.00
2019-20 7,96,669 14.00
2020-21 7,59,524 -5.00
 Export Performance of SEZs Growth Rate
120
102
100 97
88
80
67
60 56
46 50
43 44
40

20 15
0
0
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020-
11 12 13 14 15 16 17 18 19 20 21
 Top 10 Export Destination for the year 2020-21

54659
FOB Value in Rs. Cr.

18812 16343
14663
10787
7660 7553 7092 5829 5305
E g e a ia ia d
SA A o n
p o r
ain
ts ral y s lan iu m U
K
U U K g a h ala er lg
g n C u th Be
o n S i A M e
H N
 Direct Employment through SEZs in India
3000000

2560286
2500000

2238305
1977216 2061055
2000000

1731641
1591978
1500000

1000000

500000

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

 Findings
• A Special Economic Zone (SEZ) is a geographically demarcated area in India that is
considered a part of the country and focuses on promoting exports.
• Special Economic Zones to increase foreign investment and trade, increase the
export of goods and services, create employment in the country, improve
infrastructure, etc.
• Special Economic Zones reduce the IGST revenue of the Government of India. The
government had to reduce taxes under SEZ to Rs 9877 crore in 2016-17, Rs 12749
crore in 2017-18, and Rs 24506 crore in 2020-21.
• Rs 315868 Cr from India in 2010-11 due to special economic zone. Exports
increased to Rs 759524 Cr in 2020-21.
• This growth doubled in 2020-21 as compared to 2010-11.
• From 2010-11 to 2020-21, exports under SEZs increased by 97%.
• Under SEZ, 15,91/978 jobs were created in 2015-16. Then in 2020-21, 2560268
jobs got.
 Conclusion
• In this project, we found that the Government of India scheme (SEZ)
has a definite effect on IGST. Firstly, On the one side, The
Government of India has implemented the Special Economic Zone
(SEZ) scheme, but this has significantly reduced the IGST revenue
of the government.
• But, if we consider the other side, it is understood that even if the
revenue of the government is decreasing, its benefit is more than
huge for foreign direct investment, job creation, creating
infrastructure, etc.
 Suggestion
• SEZ units should be allowed to do job work for DTA units for better
capacity utilization.
• SEZs should be treated as EDI Ports.
• Supplies from DTA to FTWZ should be treated as Physical Exports.
• It would be good for SEZs to develop larger areas, not just small
enclaves, as done in the case of EPZs earlier in the country.
• How to bring maximum FDI into the country under SEZ and how to
create maximum employment under SEZ, etc. Government should
work on this.
 BIBLIOGRAPHY:
 Articles Referred:
 Aggarwal Aradhana (2004). Export processing zones in India: analysis of
the export performance. – working paper no. 148. New Delhi: ICRIER.
 Arora, o p (2003). Compilation of circulars on EPZ/SEZ/EOU issued by
CBEC, DGFT & RBI. Published BYM/s Ankur Arora associates.
 Lift (1990). Exports processing zones in India: a case study of Kandla free
trade zone. Indian institute of foreign trade occasional paper. New Delhi.
Websites Referred:
 www.sez.nic.in
 https://www.indiabudget.gov.in/
 https://www.indiabudget.gov.in/doc/rec/annex7.pdf