Without legislative backup, govt must not amend rules

The GST Council should prevail on the government to avoid such practices as they lead to unnecessary litigation

The Finance Bill, 2021, proposes three amendments to Section 16 of the Integrated Goods and Services Tax (IGST) Act, 2017, that are of interest to exporters. Two of these seek to legitimise restrictions introduced through the Central Goods and Services Tax (CGST) Rules, 2017, and one intends to bring in fresh restrictions.

The first amendment intends to zero-rate supplies of goods or services to special economic zone (SEZ) developers or SEZ units only when the supplies are for authorised operations. In fact, Rule 46 and Rule 89 of the CGST Rules already refer to supplies to SEZ developers/units for authorised operations.