CBIC implement special one-time relief window for clearance of manufactured goods from Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA) at concessional rates of customs duty
The Ministry of Finance, through Notification No. 11/2026-Customs dated 31st March 2026, grants conditional customs duty exemptions on goods manufactured by Special Economic Zone (SEZ) units and cleared to the Domestic Tariff Area (DTA). The exemption applies to specified goods listed in Table I and Table II, allowing reduced customs duty and, in certain cases, reduced Agriculture Infrastructure and Development Cess (AIDC), subject to compliance with prescribed conditions. The benefit is available only to SEZ units that commenced production on or before 31st March 2025 and can demonstrate adherence to the notification’s annexure conditions. However, the exemption excludes units in Free Trade and Warehousing Zones and goods imported into SEZs that are subsequently cleared to DTA. Eligible units are subject to audit under SEZ Rules, 2006. The notification comes into force on 1st April 2026 and remains valid until 31st March 2027.
Ministry of Commerce & Industry
Government notifies Conditional Concessional Customs Duty for SEZ to Domestic Tariff Area sales to boost manufacturing capacity
Measure to benefit around 1,200 SEZ units; Boost scale, cut costs, enhance resilience
Posted On: 01 APR 2026
In line with the Budget announcement 2026, conditional customs duty concessions have been notified on clearance of goods manufactured in Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA) to improve capacity utilisation of manufacturing units impacted by global trade disruptions. The measure is expected to benefit approximately 1,200 SEZ manufacturing units by enabling economies of scale, reducing costs and enhancing resilience, while preserving the export-oriented nature of SEZs.
The measure allows eligible SEZ manufacturing units to clear goods to the DTA at concessional duty rates, subject to a limit of 30 per cent of the highest annual Free on Board export value achieved in any of the three immediately preceding financial years. Export benefits such as duty drawback on inputs are not permitted for such clearances to prevent double benefits.
The notification prescribes key eligibility conditions, including a minimum 20 per cent value addition within the SEZ, calculated using a defined formula based on assessable value and input costs.
The concessional framework covers a broad range of sectors including mineral products; chemical products; plastics and rubber; hides and skins, leather products and articles of furskins; wood, cork and paper; textiles and textile articles; footwear and headgear; stone, ceramic and glass; base metals and articles thereof; machinery and electrical equipment; vehicles, aircraft and transport equipment; optical, medical and scientific instruments; arms and ammunition; and miscellaneous manufactured articles. However, sectors such as agriculture (including marine and processed food products, tobacco, etc.), marble and granite, gems and jewellery, vehicles, toys and petroleum are excluded.
For availing concessional duty benefits, SEZ units are required to furnish a Development Commissioner’s certificate confirming compliance with conditions, along with a declaration to pay full duty in case of non-fulfilment. The units will also be subject to audit under SEZ Rules, 2006. The notification is effective from April 1, 2026 to March 31, 2027.
The above has been implemented vide Notification No. 11/2026-Customs dated March 31, 2026 issued under Section 25(1) of the Customs Act, 1962. The notification grants conditional customs duty concessions on goods manufactured in SEZs and cleared to the DTA, including reduced duty rates and, in certain cases, partial exemption from Agriculture Infrastructure and Development Cess. It applies to units that commenced production on or before March 31, 2025 and meet specified conditions, while excluding Free Trade Warehousing Zone units and goods imported into SEZs and cleared to DTA without adequate manufacturing.
As per Section 30 of the Special Economic Zones Act, 2005, clearance of goods from SEZs to the DTA is treated as imports into India and attracts applicable customs duties, which had affected the competitiveness of SEZ manufacturers. The present measure addresses this concern while ensuring a level-playing field for units operating in the DTA.
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Ministry of Finance
CBIC introduces one-time relief measure for eligible units in SEZs to sell manufactured goods in Domestic Tariff Area (DTA) at concessional customs duty rates to address concerns arising due to global trade disruptions, as announced in Union Budget 2026–27
Relief to be effective from April 1, 2026 to March 31, 2027 via Customs notification with 31st March, 2025, being the cut-off date for eligibility of operational SEZ units
Minimum 20% value addition mandated for manufactured goods cleared under the relief window.
Relief retains export focus with select sensitive sectors excluded to safeguard domestic industry; DTA sales capped at 30% of past peak export performance in any of three immediately preceding financial years
Posted On: 01 APR 2026
In pursuance of the Union Budget 2026-27 announcement to address the concerns faced by the manufacturing units in the Special Economic Zones (SEZ) due to ongoing global trade disruptions, the Central Board of Indirect Taxes and Customs (CBIC) today introduced a special one-time relief measure to facilitate sales by eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA) at concessional rates of duty.
The Union Budget announcement is being implemented through an exemption notification issued under section 25 of the Customs Act, 1962, for the manufactured goods cleared by SEZ units to DTA and will be in force with effect from 1st April 2026 till 31st March 2027 (notification No. 11/2026- Customs dated 31.03.2026).
While determining the concessional rates for eligible SEZ units under this relief window, due care has been taken to ensure a level playing field for the units working in the DTA.
Under this relief window, concessional rates of customs duty have been prescribed for notified goods as per the details below:
| Present customs duties (including BCD, AIDC, Health Cess) | Concessional rate for eligible SEZ units under the relief window |
| 7.5% | 6.5% |
| 10% | 9% |
| 12.5%, 15% | 10% |
| 20% | 12.5% |
| Between 20% and 30% | 15% |
| Between 30% and 40% | 20% |
The SEZ units claiming benefit under this relief window should have commenced production of goods on or before 31.03.2025.
The goods manufactured by such units, for which benefit is claimed under this relief window, should have undergone value addition of minimum 20% 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% of the highest annual FOB value of exports in any of three immediately preceding financial years.
The relief window will be implemented through CBIC’s automated system and the assessment of bills of entry for DTA clearances under this relief window will be done under the faceless assessment mechanism.
Further, certain sectors have been excluded from this relief window on account of certain sensitivities and to protect the domestic industry.
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 11/2026-Customs | Dated: 31st March, 2026
G.S.R. 242(E).—In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts, –
i. the goods of the description as specified in column (3) of TABLE I below and falling under the chapter or heading or sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said TABLE, when manufactured by a Unit in a Special Economic Zone (hereinafter referred to as ‘SEZ’) and removed to Domestic Tariff Area (hereinafter referred to as ‘DTA’), from so much of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate as specified in the corresponding entry in column (4) of the said TABLE subject to all the conditions specified in the Annexure to this notification;
ii. the goods of the description as specified in column (3) of TABLE II below and falling under the chapter or heading or sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said TABLE, when manufactured by a Unit in a SEZ and removed to DTA, from so much of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said TABLE, and from so much of the Agriculture Infrastructure and Development Cess (AIDC) leviable under section 124 of the Finance Act, 2021 (13 of 2021), as is in excess of the amount calculated at the rate specified in the corresponding entry in column (5) of the said TABLE subject to all the conditions specified in the Annexure to this notification:
Provided that this exemption shall be available only if the Unit in the SEZ, –
i. had commenced production of goods on or before the 31st day of March, 2025, and
ii. proves to the satisfaction of the proper officer, that the goods in respect of which benefits of this exemption notification have been claimed, fulfil all the conditions specified in the Annexure to this notification:
Provided further that nothing contained in this notification shall apply to,-
i. Units set up in a Free Trade and Warehousing Zone, or
ii. goods which after importation in the SEZ are removed, as such or after use, to the DTA.
2. The Units claiming exemption under this notification shall be subject to audit under Rule 79 of the Special Economic Zones Rules, 2006.
3. This notification shall come into force with effect from the 1st day of April, 2026.
4. Nothing contained in this notification shall have effect after 31st day of March, 2027.
[F. No. 334/04/2026-TRU]
DHEERAJ SHARMA, Under Secy.
