Circular No. 24/2003-Cus
1st April, 2003

F.No.602/2/2002-DBK
Government of India
Ministry of Finance & Company Affairs
Department of Revenue

Sub: Admissibility of duty drawback to the supplies effected by DTA Units to Special Economic Zones – reg.

Customs Act, 1962 was amended last year and Chapter XA has been added detailing special provisions relating to Special Economic Zones. Section 76-I of the Customs Act has provided that any goods admitted to a Special Economic Zone (SEZ) from the Domestic Tariff Area (DTA) shall be eligible for drawback under Section 75 as if such goods are export goods for the purposes of that Section.

2.  Accordingly, rule 2 (c ) of the Customs and Central Excise Duties Drawback Rules, 1995, has been amended. The supplies made to the SEZ by the DTA units thus shall be treated as physical exports and these shall be eligible for both – All Industry Rates of Duty Drawback notified under rules 3 and 4 of the said rules and Brand Rate of Duty Drawback fixed under rule 6 or 7, as the case may be, of these rules.

3.  Since SEZs are special areas designated by the Government, the procedural requirements of the same need to be spelt out clearly to obviate any confusion at the field level and to dispel doubts in the minds of trade. The issue has been examined.

4.  It has been decided that the area of the Special Economic Zone shall be a Customs Station and all the functions relating to the enforcement of the Customs Act shall be controlled by the Commissioner of Customs with the assistance of proper officers of Customs. The goods entered into the SEZ from the DTA shall be under the cover of a Bill of Export. This Bill shall be registered in the SEZ Customs formation and assigned a running serial number. Thereafter, the goods shall be examined by the Customs Officers posted in the SEZ like a normal export consignment. These goods shall be eligible for drawback at the All Industry Rates or Brand Rates, as the case may be. Drawback shall be disbursed to the SEZ Unit receiving supplies from DTA Unit on the basis of a disclaimer certificate given by the DTA Unit in favour of SEZ Unit. The drawback amount so calculated shall be disbursed either by cheque or by directly crediting into the account of the SEZ Unit maintained by designated branch operating at the SEZ Complex.

5.  Suitable public notices for information of the Trade and standing orders for guidance of the staff may kindly be issued accordingly.

6. The receipt of this Circular may kindly be acknowledged.

S.S. Renjhen
Joint Secretary to the Government of India

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