Centre Announces One-Time Duty Relief for SEZ Units to Sell in Domestic Market Amid ME Crisis

Ziraat Times Team Report

New Delhi, April 1: The Central Board of Indirect Taxes and Customs (CBIC) has introduced a one-time relief measure allowing eligible manufacturing units in Special Economic Zones (SEZs) to sell goods in the Domestic Tariff Area (DTA) at concessional customs duty rates, in line with the announcement made in the Union Budget 2026–27.

According to an official release issued on Wednesday, the relief measure will be in effect from April 1, 2026 to March 31, 2027. It will be implemented through an exemption notification issued under Section 25 of the Customs Act, 1962 (Notification No. 11/2026-Customs dated March 31, 2026). The move is aimed at addressing concerns faced by SEZ manufacturing units due to ongoing global trade disruptions.

Eligibility and Conditions

Under the scheme, only SEZ units that had commenced production on or before March 31, 2025 will be eligible to avail the concessional duty rates. Additionally, the goods cleared to the domestic market must have undergone a minimum value addition of 20% over inputs.

The government said the measure is designed to support SEZ units while maintaining a level playing field for manufacturers operating in the domestic tariff area.

Concessional Duty Structure

CBIC has prescribed reduced customs duty rates for eligible goods cleared to the domestic market. These include:

• Existing duty of 7.5% reduced to 6.5%

• 10% reduced to 9%

• 12.5% or 15% reduced to 10%

• 20% reduced to 12.5%

• Duties between 20% and 30% reduced to 15%

• Duties between 30% and 40% reduced to 20%

Export Focus Retained

The government emphasized that the export orientation of SEZ units will remain intact. Sales to the domestic market under the concessional window will be capped at 30% of the highest annual FOB export value achieved by the unit in any of the three immediately preceding financial years.

At the same time, certain sensitive sectors have been excluded from the relief measure to safeguard domestic industry.

Digital Implementation

The relief window will be implemented through CBIC’s automated system, with assessment of bills of entry for DTA clearances carried out under the faceless assessment mechanism. Authorities said detailed FAQs will also be issued to provide further clarity to stakeholders.

The measure is expected to provide temporary flexibility to SEZ manufacturers facing disruptions in global trade while ensuring that domestic industries remain protected.