One-Time Relief for SEZ Units: Concessional DTA Sales under Union Budget 2026-27

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One-Time Relief for SEZ Units: Concessional DTA Sales under Union Budget 2026-27

In a strategic move to mitigate the impact of global trade disruptions, the Ministry of Finance, through the Central Board of Indirect Taxes and Customs (CBIC), has introduced a one-time relief measure for Special Economic Zone (SEZ) units.

Implemented via Notification No. 11/2026-Customs (dated 31.03.2026), this measure allows eligible SEZ units to clear manufactured goods into the Domestic Tariff Area (DTA) at concessional rates of customs duty for a limited window.

Key Highlights of the Relief Window

The relief is designed to balance the interests of SEZ exporters while ensuring that the domestic industry remains protected.

  • Effective Period: 1st April 2026 to 31st March 2027.
  • Eligibility Cut-off: Only SEZ units that commenced production on or before 31.03.2025 are eligible.
  • Value Addition Mandate: A minimum of 20% value addition is required for goods cleared under this scheme.
  • DTA Sale Cap: To maintain the “export-first” nature of SEZs, DTA sales at concessional rates are capped at 30% of the highest annual FOB value of exports achieved in any of the three immediately preceding financial years.
Revised Concessional Duty Structure
    Present Customs DutiesConcessional Rate under Relief Window
    7.5%6.5%
    10%9%
    12.5% or 15%10%
    20%12.5%
    Between 20% and 30%15%
    Between 30% and 40%20%

    Operational Mechanism & Compliance

    To ensure transparency and ease of doing business, the CBIC has integrated this relief into the existing digital infrastructure:

    1. Faceless Assessment: Assessment of Bills of Entry for DTA clearances under this window will be conducted via the automated faceless assessment mechanism.
    2. Sectoral Exclusions: It is important to note that certain “sensitive sectors” are excluded from this relief to safeguard domestic manufacturers.
    3. Documentation: Units must ensure that their value addition calculations and past export performance data are robustly documented to meet audit requirements.

    This notification provides a much-needed “safety valve” for SEZ units facing sluggish global demand. By lowering the cost of entry into the domestic market, the government is helping these units maintain capacity utilization. However, the 30% cap and the strict 31.03.2025 cut-off date mean that this is a targeted intervention rather than a permanent policy shift.

    For units looking to leverage this window, a thorough review of past export performance and current cost structures is advised to maximize the fiscal benefit.

    References:

    • Notification No. 11/2026-Customs dated 31.03.2026
    • Section 25 of the Customs Act, 1962
    • PIB Press Release dated 01.04.2026

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