CBIC offers one-time duty relief for SEZ units to boost domestic sales

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 market at concessional customs duty rates, aiming at cushioning the impact of global trade disruptions. 

According to an official notification on Wednesday, the relief, announced in the Union Budget 2026–27, will be available from April 1, 2026 to March 31, 2027. It will be implemented through a customs notification issued under the Customs Act, 1962. 

According to the statement, the move is meant “to address the concerns faced by the manufacturing units in the Special Economic Zones (SEZ) due to ongoing global trade disruptions” and to “facilitate sales by eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA) at concessional rates of duty.” 

Under the scheme, customs duty rates have been reduced across slabs. For instance, goods currently attracting 10% duty will now be taxed at 9% while those in the 20% brackets will face a reduced rate of 12.5%. Higher slabs of 30–40% will see duties cut to 20%. 

Strict eligibility conditions 

The relief comes with clear conditions to ensure it does not dilute the export-oriented nature of SEZs. Only units that began production on or before March 31, 2025, will be eligible. 

Further, goods must have a minimum value addition of 20% over inputs to qualify for concessional duty benefits. 

“The emphasis on exports by SEZ units shall remain,” the government said, adding that domestic sales under this window will be capped. “DTA sales at concessional rates… shall not be more than 30% of the highest annual FOB value of exports in any of three immediately preceding financial years.” 

Balancing domestic industry concerns 

The government has also excluded certain sensitive sectors from the scheme to protect domestic manufacturers. Officials said “due care has been taken to ensure a level playing field for the units working in the DTA.” 

The process will be handled through CBIC’s automated system, with clearances assessed under the faceless mechanism to ensure speed and transparency. The move is likely to provide temporary relief to export-focused SEZ units facing demand uncertainties globally, while maintaining safeguards for domestic industry.