SEZ Duty - Free Reaffirmed

The Andhra Pradesh High Court in TUF Metallurgical Pvt. Ltd. v. Union of India delivered a landmark ruling clarifying the scope of taxability on supplies from the Domestic Tariff Area (DTA) to Special Economic Zones (SEZs). J the App by JustIDT analyses the case where the issue involved the levy of export duty on chrome concentrate supplied from Odisha mines to an SEZ unit should attract export duty or not. The Court struck down the 5th proviso to Rule 27(1) of the SEZ Rules, 2006, holding it ultra vires the SEZ Act, 2005 and the Constitution, thereby reinforcing the principle that no tax or duty can be imposed without clear statutory authority.