Concessional Customs duty to SEZs for sales to domestic areas is a one-time, time-bound scheme

The government on April 2 underlined that the Customs duty concessions for sales by special economic zones in domestic tariff areas is a one time, time bound measure that would continue for a year to help these units tackle the trade disruption due to the ongoing global volatility.  

It is expected that the department of commerce will in the meantime continue their work on broad basing export incentive schemes that will take care of the concerns of SEZs as well, sources underlined.

“As announced in the Union Budget, this scheme is applicable only for one year. The department of commerce is broadbasing their export incentive schemes. It is expected that they will work out these schemes so that the concessional customs duty scheme will not have to be extended,” the sources explained.

The measure was announced in the Union Budget 2026-27 by Finance Minister Nirmala Sitharaman “to address the concerns arising about utilisation of capacities by manufacturing units in the Special Economic Zones due to global trade disruptions”.

Sources underlined that the focus of SEZs will continue to be on exports and there is no dilution of the government on that stance. “This current scheme has to be understood in the context of the current geopolitical situation that has disrupted trade,”” they noted.

The Central Board of Indirect Taxes and Customs on April 1 announced a one-time relief measure for eligible units in SEZs to sell manufactured goods in Domestic Tariff Area (DTA) at concessional customs duty rates, which would be applicable for only FY27. Under the scheme, eligible units in SEZs would have concessional customs duty rates from 6.5% to 20% for sales to DTAs provided they do a minimum 20% value addition on the manufactured goods. Domestic sales have been restricted to 30% of the highest export performance in the last three fiscal years.

Food and petroleum products have been kept out of the concessional scheme.