Question : Whether deemed credit is available in respect of goods purchased from tax free zones?

Answer: The deemed credit in terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with
Section 140(3) of the CGST Act, 2017 would be available in respect of the goods, which were not unconditionally
exempt from the whole of the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985
or were not nil rated in the said Schedule. As the goods purchased from tax free zones were exempted from
duty payment under a Notification issued under Section 5 of the Central Excise Act, 1944 and not Nil rated in the
First Schedule to the Central Excise Tariff Act, 1985, the deemed credit would be available in respect of such
goods held in stock on the appointed day.

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