Concessional Duty Benefits for SEZ Units Clearing Goods to Domestic Tariff Area (DTA)

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Dated: 01.04.2026

Concessional Duty Benefits for SEZ Units Clearing Goods to Domestic Tariff Area (DTA)

The Government of India, through the Ministry of Finance and the Central Board of Indirect Taxes & Customs (CBIC), issued Circular No. 18/2026-Customs on April 1, 2026, to provide clarity on the assessment of Bills of Entry filed for goods manufactured by Special Economic Zone (SEZ) units and cleared to the Domestic Tariff Area (DTA) under concessional duty rates. This article provides a detailed overview of the circular, its implications, and the conditions for availing the concessional duty benefits.

Key Highlights of Circular No. 18/2026-Customs

1. Notification No. 11/2026-Customs

The circular references Notification No. 11/2026-Customs, issued on March 31, 2026, which extends concessional duty benefits to eligible manufacturing units in SEZs for goods cleared to the DTA. The notification specifies that the Bill of Entry for home consumption must be filed by the SEZ unit on the common portal and assessed by the proper officer as per Section 2(34) of the Customs Act, 1962.

2. Valuation and Assessment of Goods 

The valuation and assessment of goods cleared into the DTA must comply with the Customs Act, 1962, and the SEZ Rules, 2006. Specifically, Rule 47(4) of the SEZ Rules, 2006, mandates that the valuation and assessment of goods cleared into the DTA be conducted in accordance with customs laws and regulations.

3. Implementation of Faceless Assessment 

To ensure uniformity and efficiency, the CBIC has decided that Bills of Entry filed for goods manufactured by SEZ units and cleared to the DTA will be assessed under the faceless assessment system. This process will be integrated with the Risk Management System (RMS), and the Customs Automated System will assign these Bills of Entry to faceless assessment officers.

4. Compliance Requirements

The circular emphasizes that the existing procedures for filing Bills of Entry by SEZ units and compliance requirements under the SEZ Act, 2005, and SEZ Rules, 2006, remain unchanged. However, SEZ units must adhere to the specific compliance requirements outlined in Notification No. 11/2026-Customs to avail the concessional duty benefits.

5. Post-Assessment Formalities

The jurisdictional specified officer/authorized officer at the SEZ location will continue to handle post-assessment formalities, including:

Examination of goods (if ordered),
Issuance of out-of-charge orders,
Other functions unrelated to the assessment of consignments.

6. Grievance Redressal

To address any grievances related to delays in assessment or other implementation challenges, the ICEGATE Helpdesk (icegatehelpdesk@icegate.gov.in) will serve as the primary point of contact. The helpdesk will forward issues to the Turant Suvidha Kendras (TSKs) of field formations for timely resolution.

7. Advisory and Implementation 

The Directorate General of System and Data Management will issue a suitable advisory to facilitate the implementation of the provisions outlined in the circular. All field formations are instructed to ensure smooth execution of the circular’s guidelines.

Notification No. 11/2026-Customs: Concessional Duty Benefits 

Scope of Exemption 

The notification exempts certain goods manufactured by SEZ units and cleared to the DTA from customs duties and the Agriculture Infrastructure and Development Cess (AIDC), subject to specific conditions. The exemption applies to goods listed in Table I and Table II of the notification.

Conditions for Availing Exemption 

To avail the concessional duty benefits, SEZ units must meet the following conditions:

Filing of Bill of Entry: The Bill of Entry for home consumption must be filed on the common portal and assessed by the proper officer.
Value Addition Requirement: The goods must undergo a minimum value addition (VA) of 20%, calculated using the formula:
- VA = [(A – (B + C)) / (B + C)] x 100
- A = Assessable value of goods removed into DTA,
- B = Cost, insurance, and freight value of imported inputs used for manufacturing,
- C = Value of inputs procured from DTA used for manufacturing.
Export Threshold: The aggregate value of goods removed to the DTA in a financial year must not exceed 30% of the highest annual Free on Board (FOB) value of exports of manufactured goods made by the SEZ unit in any of the three immediately preceding financial years.
No Export Benefits: No duty drawback or other export benefits under the Foreign Trade Policy should have been availed for the inputs used in manufacturing the goods.
Certification and Declaration: At the time of removal, the SEZ unit must:
- Obtain a certificate from the jurisdictional Development Commissioner confirming the date of production commencement, annual FOB value of exports, and value addition achieved.
- Submit a declaration to pay the duty applicable on the goods in case of non-compliance with the conditions.

Exclusions

The notification does not apply to:

Units set up in Free Trade and Warehousing Zones.
Goods imported into the SEZ and removed to the DTA without undergoing manufacturing or after use.

Validity

The notification is effective from April 1, 2026, and will remain valid until March 31, 2027.

Faceless Assessment: A Step Towards Efficiency 

The introduction of faceless assessment for Bills of Entry filed by SEZ units is a significant step toward streamlining customs processes. By leveraging technology and the Risk Management System (RMS), the CBIC aims to enhance transparency, reduce delays, and ensure uniformity in the assessment of goods.

Grievance Redressal Mechanism 

The circular provides a robust mechanism for addressing grievances related to delays or implementation challenges. The ICEGATE Helpdesk will act as the first point of contact for trade-related issues, ensuring that concerns are promptly addressed by the Turant Suvidha Kendras (TSKs).

Conclusion

Circular No. 18/2026-Customs and Notification No. 11/2026-Customs mark a significant development in facilitating trade between SEZ units and the Domestic Tariff Area. By introducing concessional duty benefits and implementing faceless assessment, the Government of India aims to promote efficiency, transparency, and ease of doing business. SEZ units must ensure compliance with the specified conditions to avail the benefits under this notification.

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Source: CBIC, Ministry of Finance, Govt. of India

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