New Delhi: In line with the Union Budget 2026–27 announcement, the Central Board of Indirect Taxes and Customs (CBIC) has introduced a one-time relief measure for eligible manufacturing units in Special Economic Zones (SEZs), allowing them to sell goods in the Domestic Tariff Area (DTA) at concessional customs duty rates. This initiative aims to help SEZ units mitigate challenges arising from global trade disruptions.
Relief Window Effective from April 2026 to March 2027
The concessional duty scheme will be effective from April 1, 2026, to March 31, 2027, under Customs Notification No. 11/2026, issued on March 31, 2026. The eligibility cut-off date for operational SEZ units is March 31, 2025.
Officials noted that this relief ensures a level playing field for SEZ units and Domestic Tariff Area manufacturers while providing temporary support to SEZ exporters facing global market challenges.
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Minimum Value Addition and Export Cap
Key conditions for SEZ units under the relief window include:
- Minimum 20% value addition required for manufactured goods cleared under this scheme
- DTA sales capped at 30% of the highest annual export performance (FOB value) in any of the three preceding financial years
- Certain sensitive sectors excluded to safeguard domestic industry
This ensures that the primary focus of SEZ units remains on exports while providing flexibility to sell surplus products in the domestic market.
Concessional Customs Duty Rates for Eligible SEZ Units
The Central Board of Indirect Taxes and Customs (CBIC) has announced concessional customs duty rates for eligible SEZ units under the one-time relief window to facilitate DTA sales while balancing competitiveness. Key points of the scheme include:
- Goods currently attracting 7.5% duty will be levied at 6.5%.
- Items with a 10% duty will now attract 9%.
- Products with 12.5% and 15% duty will be charged 10%.
- Goods currently at 20% duty will see a reduction to 12.5%.
- Higher duty slabs of 20–30% and 30–40% will be reduced to 15% and 20%, respectively.
- These concessional rates are applicable only to eligible SEZ units that meet the minimum value addition and export-related conditions under the relief window.
The concessional rates are designed to support operational SEZ units without impacting domestic manufacturers’ competitiveness.
Automated and Faceless Assessment
The relief window will be implemented through CBIC’s automated system, and assessment of bills of entry for DTA clearances under this scheme will be conducted using the faceless assessment mechanism, ensuring efficient and transparent processing.
Additionally, CBIC has issued FAQs for further clarification regarding eligibility, applicable goods, and operational guidelines.
Objective: Strengthening SEZ Competitiveness Amid Global Challenges
The move is part of the government’s broader effort to support SEZ manufacturing units, enhance their competitiveness, and address supply chain disruptions caused by global trade uncertainties. By allowing limited DTA sales at concessional rates, the initiative balances export focus with domestic market flexibility, while safeguarding sensitive sectors and domestic industries.
