GST Compliance in SEZs: Benefits and Challenges in DTA Procurement

Special Economic Zones (SEZs) are intended to support exports, investment and employment through a dedicated regulatory framework. Under India’s Goods and Services Tax (GST) regime, supplies of goods or services to an SEZ unit or developer for authorised operations are treated as zero-rated supplies, subject to the applicable legal conditions. While this framework is designed to reduce the tax burden on eligible transactions, its practical benefits depend on correct classification, accurate documentation, timely approvals and effective refund procedures. This paper examines the GST framework relevant to SEZ operations, with particular attention to authorised operations and procurement from the Domestic Tariff Area (DTA). It uses a descriptive approach, combining review of statutory and government sources with practical observations from an MBA On-the-Job Training(OJT). Official SEZ export data are used to describe performance trends; the analysis does not treat export growth as proof that GST alone caused the change. The discussion identifies documentation quality, invoice verification, tracking of requests, clarity over authorised operations and coordination among stakeholders as important operational considerations. The paper recommends standardised pre-submission checklists, centralised tracking, periodic compliance training and clearer communication between SEZ units, suppliers and authorities. Because the practical observations arose from a short OJT placement and confidential operational data were not available for independent testing, the findings should be read as exploratory rather than nationally representative. Keywords: Goods and Services Tax; Special Economic Zones; SEZ; Domestic Tariff Area; DTA procurement; authorised operations; zero-rated supply; compliance.