Removal of Goods from SEZ to DTA units & payment of Duties

Removal of Goods from SEZ (Special Economic Zone)to DTA (Domestic Tariff Area) units and payment of Duties

Rule 49 of SEZ Rules, 2006 deals with the situation in which SEZ units removing the goods from SEZ (Special Economic Zone) area to DTA (Domestic Tariff Area) are eligible for abatement  of duties in certain cases.

Further it is clarified that the provisions of Rule 49 are applicable to SEZ units as well as SEZ developers equally.

The provisions of Rule 49 may be summarized as under:

A. Removal of Capital Goods from SEZ to DTA

– Capital goods can be removed from SEZ to DTA on depreciated value for the purpose of payment of duty.

– Where the capital goods acquired on or before commencement of production, depreciation will be calculated from date of commencement

– Where the capital goods acquired after commencement of production, depreciation will be calculated after the date of put to use.

– Depreciation is allowed on SLM (Straight Line Method)

– Rates of Depreciation will be as follows:

For computers and computer peripherals:

– First Year – 10% for every quarter

– Second Year – 8% for every quarter

– Third Year – 5% for every quarter

–  Forth Year – 1% for every quarter

– Fifth Year – 1% for every quarter

For other capital goods

– First Year – 4% for every quarter

– Second Year – 3% for every quarter

– Third Year – 3% for every quarter

– Forth Year – 2.5% for every quarter

– Fifth Year – 2.5% for every quarter

– Sixth Year onwards – 2% for every quarter

Duty shall be payable on depreciated value of capital goods at the rate in force on the date of removal of such goods.

Quarter means – Full Quarter or Part of Quarter

B.  Where the goods brought back in SEZ unit for repair:

– SEZ untit requires to pay duty on the value of repair

– Goods may be brought back within 6 months or within warranty period whichever is later or within extended period as may be permitted.

C. From SEZ to DTA where originally received from DTA

– Where export benefits availed at the time of receipt of goods from DTA to SEZ units – duty is payable equal to export benefits availed.

– Where no export benefits availed – no duty is payable

D. Residuary provision for supply form SEZ to DTA

– Imported goods after payment of duty in SEZ may be cleared to DTA without payment of duty – subject to identity proof.

– Used packing material may be cleared to DTA without payment of duty.

– Metal containers not eligible for benefit of abatement.

– No duty is payable on donation of Computer and computer peripherals, including printer, plotter, scanner, monitor, key board and storage units (whether imported or procured from Domestic Tariff Area) – to the recognized non-commercial educational institutions or registered charitable hospitals or public libraries or public funded research and development establishments or organizations of Government of India or Government of a State or Union Territory, after two years of admission of goods and use by a Unit,