Govt eases SEZ domestic sales norms to support exporters; who qualifies and what’s the catch?

As part of efforts to support exporters hit by global trade disruptions, the government on Wednesday allowed select manufacturing units in Special Economic Zones (SEZs) to sell goods in the domestic market at concessional customs duty rates for one year.

The Central Board of Indirect Taxes and Customs (CBIC) notified the one-time relief measure, announced in the Union Budget 2026-27, which will be effective from April 1, 2026 to March 31, 2027.

Under the scheme, eligible SEZ units will be permitted to clear specified goods into the Domestic Tariff Area (DTA) at lower duty rates than those currently applicable.

For example, goods attracting 20% duty will now be taxed at 12.5%, while those in the 30–40% bracket will face a concessional rate of 20%.

The relief will be available only to SEZ units that commenced production on or before March 31, 2025, and will apply to goods that have undergone a minimum value addition of 20%.

“Further, certain sectors have been excluded from this relief window on account of certain sensitivities and to protect the domestic industry,” the finance ministry said in a statement.

The government has capped domestic sales under the scheme at 30% of the highest annual export value recorded by a unit in any of the three preceding financial years.

“The emphasis on exports by SEZ units shall remain,” the ministry said.

The CBIC said the concessional rates have been calibrated to maintain a level playing field for domestic manufacturers, and certain sensitive sectors have been excluded from the benefit to safeguard local industry.

“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,” the release added.

The measure comes amid persistent global trade uncertainties, which have weighed on export demand and impacted manufacturing units operating in SEZs.