Government Allows SEZ Export Units To Sell Domestically At Concessional Rates

07 Apr 2026 CW Team

The government has allowed export oriented units in Special Economic Zones (SEZs) to sell products in the Domestic Tariff Area (DTA) at concessional duty rates, following an announcement in the Budget 2026 presented by Finance Minister Nirmala Sitharaman. The Central Board of Indirect Taxes and Customs (CBIC) introduced the measure as a special one time relief to help manufacturing units in SEZs facing disruptions in global trade. Officials said the step is designed to keep export capacity operational while easing input constraints for domestic firms.

The concessions will be available for one year from April one, 2026 to March 31, 2027 and apply only to eligible units that began production on or before March 31, 2025. The relief requires that goods for which benefit is claimed have undergone minimum 20 per cent value addition over inputs and that concessional sales respect conditions meant to preserve fair competition. The Ministry of Finance said the measures were calibrated to maintain a level playing field for units outside SEZs and to prevent diversion of export oriented production.

The DTA sales at concessional rates by eligible SEZ units shall not exceed 30 per cent of the highest annual Free on Board (FOB) value of exports in any of the three immediately preceding financial years, according to the ministry release. Sources in the ministry described the concession as a one time, time bound relief driven by immediate external challenges rather than a permanent policy shift. The CBIC will administer the window and supervise compliance with the threshold and value addition norms.

Analysts said the change has a dual benefit by allowing SEZ infrastructure to remain utilised amid weakening external demand and constrained supply routes while giving domestic industry access to capacity that could reduce reliance on delayed or costly imports. They added that the time bound measure aims to shore up manufacturing resilience until global trade conditions stabilise.

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