SEZ Units Can Sell Goods in Domestic Market at Concessional Duties

Chennai: The government has allowed Special Economic Zone units to sell in the domestic market at lower customs duties for one year, till March 2027. This offers some relief to exporters during disrupted global trade.

The one-time concession is available from Wednesday, April 1. The concessions on customs duty include basic customs duty, Agriculture and Infrastructure Development Cess, and health cess. The concession ranges from 1 per cent to 20 per cent.

For goods charged 7.5 per cent and 10 per cent, the concession would be 1 per cent, for those with 12.5 per cent and 15 per cent duty, the customs duty will come down to 10 per cent, for goods with 20 per cent to 12.5 per cent, between 20 and 30 per cent to 15 per cent and those ranging between 30 and 40 per cent to 20 per cent.

The goods manufactured by such units, for which benefit is claimed under this relief window, should have undergone value addition of a minimum 20 per cent over the inputs.

The emphasis on exports by SEZ units shall remain. DTA sales at concessional rates by the eligible SEZ units shall not be more than 30 per cent of the highest annual FOB value of exports in any of three immediately preceding financial years.

The benefit covers a wide range of products—from chemicals and fertilizers to textiles, footwear, and machinery. However, certain sectors have been excluded from this relief window on account of certain sensitivities and to protect the domestic industry, the government said.

However, according to GTRI, the impact could be marginal. “Duty concessions are marginal—1 per cent in many products—with no relief on IGST. Petrol and diesel are excluded, with only limited refinery products like petroleum coke included,” it said.

“If the objective is to boost domestic supply, stronger measures—such as restricting exports of petrol, diesel and ATF, as practiced by countries like China and Singapore—may be needed,” added GTRI.