Concessional customs duty notified for SEZ-to-domestic sales
The government on 1 April 2026 notified conditional concessional customs duty on goods manufactured in SEZs and cleared to the Domestic Tariff Area, capped at 30% of a unit's highest annual FOB exports in the previous three years.
Summary
The government notified conditional customs duty concessions on clearance of goods manufactured in Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA), in line with the Budget 2026 announcement, the Commerce Ministry said on 1 April 2026. The measure aims to improve capacity use of SEZ manufacturing units hit by global trade disruptions and is expected to benefit about 1,200 units. Eligible units can clear goods to the DTA at concessional rates up to 30% of the highest annual free-on-board export value achieved in any of the three preceding financial years, subject to at least 20% value addition within the SEZ. Export benefits such as duty drawback are not allowed on such clearances.
Key facts
- Notified
- 1 April 2026 (Budget 2026 announcement)
- Benefit
- Concessional duty on SEZ-to-DTA clearances
- Cap
- 30% of highest annual FOB exports in preceding 3 years
- Condition
- Minimum 20% value addition in SEZ
- Beneficiaries
- ~1,200 SEZ manufacturing units
- Not allowed
- Duty drawback on such clearances
Practice MCQs 2 questions
Under the concessional customs duty notified on 1 April 2026, SEZ units can clear goods to the Domestic Tariff Area up to what limit?
Show answer
Correct answer: C — 30% of the highest annual FOB export value in the preceding three years
The cap is 30% of the highest annual free-on-board export value achieved in any of the three immediately preceding financial years.
What minimum value addition within the SEZ is required to avail the concessional duty on SEZ-to-DTA clearances?
Show answer
Correct answer: B — 20%
The notification prescribes a minimum 20% value addition within the SEZ.