The relief has been implemented through an exemption notification under the Customs Act, 1962 and will remain in effect from April 1, 2026, to March 31, 2027
Pic/AFP
The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday introduced a one-time relief measure for Special Economic Zone (SEZ) units, allowing them to sell goods in the Domestic Tariff Area (DTA) at concessional duty rates amid global trade disruptions, reported news agency IANS.
Relief Measure Announced in Budget 2026-27
The move follows the Union Budget 2026–27 announcement aimed at supporting manufacturing units in SEZs affected by supply chain disruptions linked to geopolitical tensions, including the Iran conflict.
The relief has been implemented through an exemption notification under the Customs Act, 1962 and will remain in effect from April 1, 2026, to March 31, 2027.
Concessional Duty Rates for SEZ Units
Under the new framework, SEZ units can sell goods domestically at reduced customs duty rates. Duties of 20 per cent have been cut to 12.5 per cent, while those in the 20–30 per cent range have been reduced to 15 per cent, reported IANS.
Similarly, duties ranging between 30 and 40 per cent have been lowered to 20 per cent, offering significant cost relief to manufacturers.
Conditions to Ensure Fair Competition
The government has introduced safeguards to maintain a level playing field for domestic manufacturers operating in the DTA. Only SEZ units that began production on or before March 31, 2025, will be eligible for the scheme, reported IANS.
Additionally, goods sold under this relief window must have at least 20 per cent value addition over inputs, ensuring that benefits are extended only to genuine manufacturing activity.
Cap on Domestic Sales to Maintain Export Focus
To preserve the export-oriented nature of SEZs, the government has capped domestic sales under the scheme. Eligible units can sell only up to 30 per cent of their highest annual export value (FOB) recorded in any of the previous three financial years, reported IANS.
Officials emphasised that the primary objective of SEZ units will continue to remain exports, with the relief measure offering temporary flexibility during global disruptions, reported IANS.
Automated and Faceless Assessment Process
The CBIC stated that the scheme will be implemented through its automated system, with assessments of bills of entry conducted under a faceless mechanism. This is expected to ensure transparency, efficiency, and ease of compliance, reported IANS.
Certain Sectors Kept Out of Relief Window
Some sectors have been excluded from the concessional duty framework to protect domestic industries and address sector-specific sensitivities. The government is also set to release detailed FAQs to provide further clarity to stakeholders.
Support Amid Global Trade Uncertainty
The relief measure comes at a time when global trade flows have been impacted by disruptions in key supply routes and rising input costs. By easing duty burdens, the government aims to help SEZ units sustain operations and remain competitive.
Overall, the initiative is expected to provide temporary relief to exporters and manufacturers while balancing the interests of domestic industry and maintaining the integrity of the SEZ framework.
(With inputs from IANS)
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