Centre rolls out duty cuts to help SEZ units amid Iran war disruptions

The Central Board of Indirect Taxes and Customs CBIC on Wednesday introduced a onetime relief measure for Special Economic Zone SEZ units allowing them to sell goods in the Domestic Tariff Area DTA at concessional duty rates amid global trade disruptions reported news agency IANSRelief Measure Announced in Budget 202627The move follows the Union Budget 2026ndash27 announcement aimed at supporting manufacturing units in SEZs affected by supply chain disruptions linked to geopolitical tensions including the Iran conflictThe relief has been implemented through an exemption notification under the Customs Act 1962 and will remain in effect from April 1 2026 to March 31 2027Concessional Duty Rates for SEZ UnitsUnder the new framework SEZ units can sell goods domestically at reduced customs duty rates Duties of 20 per cent have been cut to 125 per cent while those in the 20ndash30 per cent range have been reduced to 15 per cent reported IANSSimilarly duties ranging between 30 and 40 per cent have been lowered to 20 per cent offering significant cost relief to manufacturersConditions to Ensure Fair CompetitionThe government has introduced safeguards to maintain a level playing field for domestic manufacturers operating in the DTA Only SEZ units that began production on or before March 31 2025 will be eligible for the scheme reported IANSAdditionally goods sold under this relief window must have at least 20 per cent value addition over inputs ensuring that benefits are extended only to genuine manufacturing activityCap on Domestic Sales to Maintain Export FocusTo preserve the exportoriented nature of SEZs the government has capped domestic sales under the scheme Eligible units can sell only up to 30 per cent of their highest annual export value FOB recorded in any of the previous three financial years reported IANSOfficials emphasised that the primary objective of SEZ units will continue to remain exports with the relief measure offering temporary flexibility during global disruptions reported IANSAutomated and Faceless Assessment ProcessThe CBIC stated that the scheme will be implemented through its automated system with assessments of bills of entry conducted under a faceless mechanism This is expected to ensure transparency efficiency and ease of compliance reported IANSCertain Sectors Kept Out of Relief WindowSome sectors have been excluded from the concessional duty framework to protect domestic industries and address sectorspecific sensitivities The government is also set to release detailed FAQs to provide further clarity to stakeholdersSupport Amid Global Trade UncertaintyThe relief measure comes at a time when global trade flows have been impacted by disruptions in key supply routes and rising input costs By easing duty burdens the government aims to help SEZ units sustain operations and remain competitiveOverall the initiative is expected to provide temporary relief to exporters and manufacturers while balancing the interests of domestic industry and maintaining the integrity of the SEZ frameworkWith inputs from IANS