Ahmedabad, April 24 -- A recent ruling in Gujarat could pave the way for units operating in Special Economic Zones (SEZs) to be exempt from paying Integrated Goods and Services Tax (IGST) on specified services procured from the Domestic Tariff Area (DTA).

This exemption hinges on these units furnishing a Letter of Undertaking (LUT) or a bond, as ruled by Gujarat-based Authority for Advance Rulings (AAR).

The services covered include transport, legal, security and employee transportation from domestic service providers.

Typically, the recipient pays GST under the reverse charge mechanism on such services. However, an advance ruling on a case involving Waaree Energies Ltd, a solar module manufacturer in Surat SEZ, has allowed it to avoid...