The Central Board of Indirect Taxes and Customs (CBIC) has issued a critical directive No. 06/2026-Customs dated April 27, 2026 to standardize the treatment of goods moved from Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA). This clarification resolves long-standing discrepancies among customs field formations, providing much-needed certainty for businesses that utilize SEZ units within their supply chains.
By explicitly classifying goods cleared from an SEZ into the DTA—upon which full customs duties have been paid—as "imported goods," the government has confirmed their eligibility for duty drawback under Section 74 of the Customs Act, 1962, when these goods are later re-exported.
Understanding the Regulatory Shift
For years, the classification of goods moving from an SEZ to the DTA created significant administrative confusion. While these goods technically enter the DTA as imports, varying interpretations at the port level often led to the denial of duty drawback claims upon their subsequent re-exportation.
The government’s new instruction removes this ambiguity. By confirming that these goods are treated as imports, the CBIC ensures that the duty drawback mechanism—which is designed to prevent the double taxation of goods intended for international markets—is applied uniformly across all customs jurisdictions. This reduces the financial burden on exporters and aligns domestic administrative practices with global trade facilitation standards.
Eligibility Criteria for Duty Drawback
To claim duty drawback on re-exports of goods that originated in an SEZ, businesses must ensure they meet the specific requirements set forth under Section 74 of the Customs Act. The key criteria are as follows:
- Payment of Import Duty: The goods must have been cleared from the SEZ into the DTA, and the applicable customs duties (including Basic Customs Duty, IGST, and any other applicable levies) must have been fully paid upon that entry.
- Identity of Goods: The exporter must demonstrate that the goods being re-exported are the same as those that were cleared from the SEZ. Proper documentation, including the original Bill of Entry, is essential for establishing this linkage.
- Timeline for Re-export: Under Section 74, the re-export must typically occur within a prescribed period from the date of payment of duty upon initial import into the DTA. Failure to adhere to these timelines can result in the rejection of the claim.
How to Claim Duty Drawback on SEZ to DTA Re-exports
Claiming duty drawback requires a structured approach to documentation and filing. Exporters should follow these steps to ensure compliance and prevent claim rejection:
1. Maintain Detailed Records: Retain copies of the Bill of Entry for home consumption, which confirms the payment of customs duties when the goods moved from the SEZ into the DTA.
2. File the Shipping Bill: When preparing the re-export of these goods, ensure the Shipping Bill is filed correctly, explicitly declaring the claim for duty drawback under the relevant provisions of the Customs Act.
3. Link the Bill of Entry: During the electronic filing process, provide the specific Bill of Entry details that reference the original duty payment. This cross-referencing is vital for the customs system to verify the tax paid.
4. Compliance Verification: Ensure that the goods have not been used in the DTA in a manner that would disqualify them from drawback benefits. Any modification or utilization must comply with current trade regulations.
5. Submission and Audit: Once the goods are exported, submit the formal claim through the ICEGATE portal. Be prepared to provide additional documentation if the customs department selects the shipment for verification or audit.
By following these procedures, businesses can leverage the clarity provided by this latest directive to optimize their export strategies. This regulatory update is a significant move toward reducing trade friction and fostering a more predictable environment for companies involved in SEZ-to-DTA operations.