CBIC Clarifies Drawback Eligibility
on SEZ-to-DTA Goods Re-exported
1.
Background Issue (Audit Observation)
o
Audit Report 33 of 2025 flagged divergent
practices in duty drawback claims
o
Some field formations denied drawback on
SEZ-to-DTA clearances
2.
Core Dispute
o
Whether goods cleared from SEZ to DTA
qualify as “imports”
o
This affects eligibility under Section 74 of
Customs Act, 1962
3.
Legal Position under SEZ Law
o
As per Section 30 of SEZ Act, 2005:
§ SEZ
→ DTA clearance attracts customs duties
o
SEZ treated as foreign territory for trade
purposes
4.
Definition of Import
o
Under SEZ Act:
§ Includes
movement of goods into SEZ or between SEZs
o
By implication, SEZ → DTA movement resembles import
into India
5.
Conditions under Section 74 (Customs Act)
o
Drawback allowed if:
§ Goods are
previously imported
§ Goods are
easily identifiable
§ Goods are
re-exported
6.
Interpretation by Board
o
SEZ-to-DTA goods:
§ Duty-paid
§ Treated
as imported goods
o
Hence, conditions of Section 74 satisfied
7.
Final Clarification
o
Goods:
§ Cleared
from SEZ to DTA on duty payment
§ Subsequently
re-exported
Eligible for drawback under Section 74
8.
Key Implication
o
Removes ambiguity and ensures uniform practice
across field formations
9.
Administrative Direction
o
Field officers instructed to allow drawback
claims in such cases
10. Residual
Clause
·
Any implementation issues to be reported to the
Board
Bottom
Line
The
clarification settles the dispute by affirming that SEZ-to-DTA clearances,
when re-exported, qualify as “imports”, making them eligible for duty
drawback under Section 74, ensuring consistency in customs administration.
[CBIC
Instruction No. 06/2026-Customs dated 27 April, 2026]
Subject:
Drawback for re-export of duty paid goods supplied by SEZ to DTA
Your attention is invited towards Audit
Para 5.8 of the Audit Report 33 of 2025 wherein it has been observed by the
Audit that divergent practices are being followed in the processing of duty
drawback claims filed by DTA units under Section 74 of the Customs Act,
1962. It has been stated that some field formations have not treated
clearance from SEZ to DTA as import and have denied the disbursement of
drawback under Section Section 74 of the Customs Act,
1962.
2. The matter has been examined in the Board. The legal provision of
domestic clearance by SEZ unit is dealt in Section 30 of the SEZ Act 2005,
which stipulates that removal of the goods from an SEZ into the DTA shall
attract Customs duties, including anti-dumping, countervailing, and safeguard
duties, as applicable under the Customs Tariff Act, 1975 (51 of 1975).
The applicable rate of duty and tariff valuation for such goods shall be
the rate and valuation in force on the date of their removal from the SEZ. In
cases where the date of removal is not ascertainable, the rate and valuation in
force on the date of payment of duty shall apply. Further, Section 2 (o) of the
SEZ Act, 2005 clearly stipulates that import means bringing goods or receiving
services, in a Special Economic Zone, by a Unit or Developer from a place
outside India by land, sea or air or by any other mode, whether physical or
otherwise; or receiving goods, or services by a Unit or Developer from another
Unit or Developer of the same Special Economic Zone or a different
Special Economic Zone. Thus, on comprehensive reading of the provisions of the
SEZ Act on DTA sale of goods cleared by SEZ are very clear and there seems to
be no lacuna.
2.1 As per Section 74 of the Customs
Act, drawback is admissible on the re-export of duty-paid goods, provided the
goods are capable of being easily identified and were previously imported
into India. The key expressions in this context are “easily identified”
and “imported into India.” The term “easily identified” implies that the
goods can be readily recognized, while “import”, as defined under the
Act, with its grammatical variations and cognate expressions, means bringing
goods into India from a place outside India. It is pertinent to note that for
the purposes of trade operations and duties, a Special Economic Zone (SEZ) is
treated as foreign territory within India. Therefore, movement of goods from an
SEZ into the DTA may be construed as an import. In view of the above, the
conditions laid down under Section 74 of the Customs Act, 1962 appear to be
satisfied.
3. In view of above, it is hereby
clarified that in cases where goods are cleared into DTA from SEZ unit on
payment of applicable duties and are re-exported thereafter are to be treated
as imported goods for the purposes of disbursement of drawback under Section 74
of the Customs Act, 1962.
4. The difficulties, if any, may
be brought to the notice of the Board.
F. No. 609/27/2026-DBK/CBIC