Concessional Customs Duty Relief for SEZ to DTA Clearance

Are your SEZ manufacturing operations running below capacity due to global trade disruptions? A special one-time customs duty relief window has been introduced in the Union Budget 2026-27 for eligible SEZ manufacturing units to clear their manufactured goods into the Domestic Tariff Area at concessional rates of customs duty.

It is a time-bound measure for duty benefits for qualified Shares/Units sold within SEZ to DTA for one year from 1st April 2026 to 31 March 2027 as per the Notification No. 11/2026-Customs dated 31st March 2026. This guide describes the Eligibility, Rates of Duty on imports, requirements for certificates of Origin, Compliance conditions, and filing of the Bill of Entry.

What Is the SEZ Relief Window 2026?

SEZ relief window 2026 is a special one-time customs duty relief scheme announced in the Union Budget 2026-27. It provides eligible units in SEZs with the opportunity to export manufactured goods in DTA at concessional rates of customs duty for a maximum period of one year.

Key Parameters at a Glance

Who Is Not Eligible?

• Units set up in Free Trade and Warehousing Zones (FTWZs) are specifically excluded
• Traded goods: goods imported into the SEZ and resold to DTA without manufacturing are excluded
• Goods that are only repacked, relabelled, refrigerated, or refurbished are not deemed to be manufactured goods under this notification

Eligibility Conditions for SEZ Units

Not all SEZ units qualify for the customs duty relief on SEZ to DTA sales. The eligibility conditions under Notification No. 11/2026-Customs are specific and must be met fully before claiming the concessional benefit.

Who Qualifies for the SEZ Relief Window 2026?

• The SEZ unit should have started manufacturing the goods on or before March 31, 2025.
• The goods must have been actually manufactured by the unit in the SEZ
• The goods must have undergone a minimum value addition of 20 per cent
• The aggregate value of goods cleared to DTA in a financial year must not exceed 30 per cent of the highest annual FOB value of exports in any of the three immediately preceding financial years

What Counts as Manufacture Under This Notification?

Manufacture is the creation, construction, production, fabrication, processing, or making of a product with a new name, character, or for use.

It does not include:

• Mere refrigeration or packing
• Re-packing or affixing of marks, labels, or logos
• Repair or refurbishment of goods

What Counts as Inputs?

Inputs for this notification include raw materials, intermediates, components, consumables, parts, and packing materials. Capital goods are not included in the definition of inputs.

Concessional Customs Duty Rates Under the SEZ Relief Window

The customs duty relief for SEZ units under this notification applies to Basic Customs Duty and AIDC as applicable. The concessional rates are structured based on the present applicable duty slab.

Duty Rate Comparison Table

Two Tables in the Notification: What They Cover

• Table I: Covers goods where only Basic Customs Duty is being notified at concessional rates
• Table II: Covers goods where both BCD and Agriculture Infrastructure and Development Cess rates are notified at concessional rates

Important: IGST and Other Levies Still Apply

The notification provides concessional rates only for BCD and AIDC. The following continue to apply at their regular rates:

• Integrated GST on SEZ to DTA clearances under Section 3(7) of the Customs Tariff Act, 1975
• Social Welfare Surcharge under Section 110 of the Finance Act, 2018
• Health Cess under Section 141 of the Finance Act, 2020

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Value Addition Requirement and DTA Sales Cap

Two quantitative conditions must be satisfied for every consignment cleared under this relief window.

Minimum Value Addition of 20 Per cent

Value addition is calculated using the following formula:

VA = (A minus B plus C) divided by (B plus C) multiplied by 100

Where:

• A = Assessable value of goods removed into DTA
• B = CIF value of all imported inputs used in manufacture
• C = Value of DTA-sourced inputs used in manufacture

DTA Sales Cap: 30 per cent of the Highest FOB Value

The aggregate value of manufactured goods cleared to DTA in a financial year under this relief window cannot exceed 30 per cent of the highest annual FOB value of exports of manufactured goods made by the unit in any of the three immediately preceding financial years (FY 2023-24, FY 2024-25, FY 2025-26).

Certificate from Jurisdictional Development Commissioner

To avail the benefit of concessional duty on SEZ to DTA clearances, the SEZ unit must obtain a certificate from its jurisdictional Development Commissioner (JDC) before filing the Bill of Entry.

What does the Certificate capture?

• Certificate ID (remains the same even after amendments)
• SEZ unit name, address, registration code, IEC code
• Date of commencement of production
• Annual FOB value of exports for FY 2023-24, FY 2024-25, and FY 2025-26
• Permissible value of goods that may be cleared to DTA
• HSN codes and CTH-wise value addition percentage achieved
• Whether the unit is located in an FTWZ (Yes or No)

How Often Must the Certificate Be Produced?

• The certificate must be produced with every Bill of Entry filed for DTA clearance.
• The same certificate (with the same Certificate ID) can be used for multiple consignments within its validity period.
• If any particulars change, such as the addition of new CTH codes or a revision in value addition percentages, the unit must get the certificate reissued or amended by the JDC before further clearances.

Filing the Bill of Entry for SEZ to DTA Clearance

The Bill of Entry for home consumption under this relief window must be filed by the SEZ unit itself on the Common Customs Electronic Portal. The DTA unit cannot file the Bill of Entry for these customs clearances.

New Document and Statement Codes Introduced

All three statement codes and the SZC001 document must be used while filing the Bill of Entry to avail the concessional duty rates.

Assessment and Examination Process

• Bills of Entry are automatically routed through the Risk Management System and assigned to Faceless Assessment Groups.
• The SEZ unit cannot choose the port or Faceless Assessment Group; assignment is automatic.
• Physical examination, if required, is carried out by officers posted at the SEZ location.
• All queries from the Faceless Assessment Group are raised and answered electronically.
• No physical submission of documents is required

Audit Liability

SEZ units claiming concessional rates under this notification will be subject to periodic audit by jurisdictional Customs under Rule 79 of the Special Economic Zones

Rules, 2006. Maintain all records of inputs, value addition calculations, and consignment-wise clearance details.

Conclusion

The SEZ relief window 2026 is a significant but time-bound opportunity for eligible manufacturing units in Special Economic Zones to access the domestic market at reduced customs duty rates.

Valid only from April 1, 2026, to March 31, 2027, the window requires strict compliance: obtain the JDC certificate before the first clearance, calculate value addition correctly, stay within the 30 per cent DTA sales cap, use the correct document and statement codes in every Bill of Entry, and do not claim duty drawback on inputs.

Frequently Asked Questions (FAQ's)

1. Which SEZ units are eligible for the SEZ relief window 2026?
Only the manufacturing units of SEZ that commenced manufacturing on or before 31 March 2025 shall be eligible. The unit should have a minimum 20 per cent value addition for the manufacturing of goods and should not be located in a Free Trade and Warehousing Zone.

2. Is there a cap on how much an SEZ unit can sell into the DTA under this window?
Yes. The total value of manufactured goods cleared to DTA in a financial year cannot exceed 30 per cent of the highest annual FOB value of exports made by the unit in any of the three immediately preceding financial years.

3. Can an SEZ unit claim duty drawback on inputs used for goods sold under this window?
No. The benefit of duty drawback or any other export benefit under the Foreign Trade Policy is not allowed on inputs used in the manufacture of goods cleared under Notification No. 11/2026-Customs, whether claimed by the SEZ unit or by the supplier of the inputs.

4. Does IGST apply to SEZ to DTA clearances under this notification?
Yes. The notification provides concessional rates only for BCD and AIDC. IGST continues to be leviable on SEZ to DTA clearances at the applicable rate under Section 3(7) of the Customs Tariff Act, 1975. Social Welfare Surcharge and Health Cess also continue to apply.

5. Who files the Bill of Entry for DTA clearances under this relief window?
The Bill of Entry must be filed by the SEZ unit itself through the Common Customs Electronic Portal. The DTA buyer cannot file the Bill of Entry. Any amendments to the Bill of Entry can also only be made by the SEZ unit that filed it.