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Centre Offers Duty Cuts to SEZ Units Amid Global Trade Disruptions

The Central Board of Indirect Taxes and Customs has introduced a one-year relief measure allowing Special Economic Zone units to sell manufactured goods to the Domestic Tariff Area at reduced customs duties. This move, effective from April 2026 to March 2027, follows a Union Budget announcement to help SEZ units facing global trade disruptions. Duty cuts range from 7.5 to 20 percentage points, with eligibility requiring production commencement by March 2025 and a minimum 20% value addition. The relief includes a cap limiting concessional domestic sales to 30% of a unit's highest export value from the previous three years.

Key Points: SEZ Units Get Customs Duty Relief for Domestic Sales

  • One-year duty relief for SEZ units
  • Cuts customs duty by 7.5-20%
  • Aims to offset global trade disruptions
  • DTA sales capped at 30% of past exports
  • Implemented via automated faceless system
2 min read

Centre rolls out duty cuts to help SEZ units amid Iran war disruptions

Government introduces one-year concessional duty rates for SEZ units selling to the domestic market to offset global trade disruptions.

"DTA sales at concessional rates... shall not be more than 30 per cent of the highest annual FOB value of exports - Official Statement"

New Delhi, April 1

The Central Board of Indirect Taxes and Customs on Wednesday introduced a special one-time relief measure for eligible units in Special Economic Zones to facilitate the sale of manufactured goods to the Domestic Tariff Area at concessional rates of duty.

The move comes in pursuance of the Union Budget 2026-27 announcement to address the concerns faced by the manufacturing units in the Special Economic Zones (SEZ) due to ongoing global trade disruptions, according to an official statement.

The Union Budget announcement is being implemented through an exemption notification issued under Section 25 of the Customs Act, 1962, for manufactured goods cleared by SEZ units to DTA and will be in force with effect from April 1, 2026, till March 31, 2027.

While determining the concessional rates for eligible SEZ units under this relief window, due care has been taken to ensure a level playing field for the units working in the DTA, the statement said.

Under this relief window, concessional rates of customs duty have been prescribed for notified goods. The customs duty of 20 per cent on goods has been reduced to 12.5 per cent, while that ranging from 20 to 30 per cent has been cut to 15 per cent. Similarly, customs duty on goods ranging from 30 to 40 per cent has been slashed to 20 per cent, the statement said.

The SEZ units claiming benefit under this relief window should have commenced production of goods on or before March 31, 2025. Besides, goods manufactured by such units, for which benefit is claimed under this relief window, should have undergone value addition of a minimum of 20 per cent over the inputs.

The emphasis on exports by SEZ units shall remain. DTA sales at concessional rates by the eligible SEZ units shall not be more than 30 per cent of the highest annual FOB (free-on-board) value of exports in any of the three immediately preceding financial years, the statement said.

The relief window will be implemented through the CBIC's automated system, and the assessment of bills of entry for DTA clearances under this relief window will be done under the faceless assessment mechanism.

Further, certain sectors have been excluded from this relief window on account of certain sensitivities and to protect the domestic industry. Detailed FAQs are also being issued for further clarification, the statement added.

- IANS

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Reader Comments

P
Priya S
This is a practical step. My cousin works in an SEZ in Chennai, and they were really worried about order cancellations due to the war. This relief window gives them breathing room. Hope the faceless assessment works smoothly without delays.
R
Rohit P
While the intent is good, I have a concern. The cap of 30% of highest past exports for DTA sales might be too restrictive for some units whose exports have collapsed completely. Could have been a bit more flexible. Otherwise, a needed policy.
M
Michael C
Interesting move. The global supply chain shocks are real. Reducing duty from say 30% to 15% is significant. The exclusion of certain 'sensitive' sectors is crucial to protect domestic players. Clarity on which sectors are excluded will be key.
S
Shreya B
Finally some relief for the manufacturing sector! This will help save jobs in SEZs. The emphasis on exports remaining primary is correct. We cannot let SEZs become just another domestic tariff area. Jai Hind!
K
Karthik V
Good step, but implementation is everything. The CBIC's automated system needs to be glitch-free. Last time, the portal had issues for days. Hope the detailed FAQs come out soon so businesses can plan properly.

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