Ψ Rule 49:
Domestic Tariff Area Removals abatement of duties in certain cases
Notification: G.S.R. 893(E)
Legal provision:
Section 55 of the Special Economic Zones Act, 2005
Amendment:
Substitution of Rule 49(2) of the SEZ Rules, 2006
Effective date:
Date of publication in the Official Gazette.
1.
Return of Duty-Paid Goods to SEZ Units
·
SEZ
Units may bring back goods supplied to the Domestic Tariff Area (DTA) on
payment of duty in the following circumstances:
o Change in fashion.
o Change in market conditions.
o Default in the terms of the sale agreement
resulting in the DTA buyer failing to take delivery.
·
The
goods must be returned within 30
days from the date of clearance from the SEZ Unit.
2.
Conditions for Return of Goods
The following conditions must be satisfied:
·
Identity
of goods: The
identity of the returned goods must be established to the satisfaction of the
Specified Officer.
·
No
benefits availed by DTA buyer:
The Unit must provide evidence that the DTA buyer who failed to take delivery
has not availed any benefits, including input tax credit.
·
Separate
inventory: The
Unit must maintain a separate inventory of returned goods in an auditable
format.
3.
Resale of Returned Goods
·
SEZ
Units may resell the returned goods in the DTA:
o To the original buyer; or
o To a different buyer.
·
The
goods must be resold without
any alteration to their original condition.
·
Applicable
duty under Section 30 of the SEZ Act must be paid as if the resale were a fresh sale into the DTA.
4.
Refund of Duty on Original Clearance
·
Refund
of duty paid at the time of the original clearance must be sought from the
appropriate authority in accordance with Rule 47(5) of the SEZ Rules, 2006.
·
Refund
of duties on goods received back will be governed by the provisions of the
Customs Act, 1962.
5.
Return of Goods for Repairs
·
Goods
supplied by an SEZ Unit to the DTA on payment of applicable duties may be
returned to the Unit for repairs.
·
The
goods must be brought back within:
o Six months from the date of clearance; or
o Such extended period as may be permitted
by the Specified Officer; or
o The warranty period, whichever is later.
·
Duty
is payable on the value of
repairs, subject to the condition that the identity of the
goods is established to the satisfaction of the Specified Officer.
The amendment provides
a formal mechanism for SEZ Units to receive back duty-paid goods when DTA
buyers fail to take delivery because of changes in fashion or market
conditions, or contractual defaults.
It also permits the
resale of returned goods in the DTA as a fresh sale, subject to applicable
duty, and facilitates the return of goods for repairs with duty payable on the
value of repairs.
Key
compliance points:
·
30
days:
Return of goods when the DTA buyer fails to take delivery.
·
No
input tax credit or other benefits:
Evidence must be provided that the DTA buyer has not availed such benefits.
·
No
alteration:
Returned goods must remain in their original condition for resale.
·
Repairs: Return within six months, an extended
period allowed by the Specified Officer, or the warranty period, whichever is
later.
·
Duty
on repairs:
Payable on the value of repairs, subject to identity verification.
[MoC Notification G.S.R. 893(E) dated 15 October, 2026]
G.S.R. 893(E). In exercise
of the powers conferred by section 55 of the Special Economic
Zones Act, 2005 (28 of 2005),
the Central Government
hereby makes the following rules further to amend the Special Economic
Zones Rules, 2006,
namely:
1.
Short title and commencement. (1) These rules
may be called the Special Economic Zones (Third Amendment) Rules, 2026.
(2) They shall come into force on the date of their publication in the Official
Gazette.
2.
In the Special Economic
Zones Rules, 2006, in rule 49, for sub-rule
(2), the following sub-rule shall be substituted, namely:
(2) Goods
supplied by a Unit into Domestic Tariff Area on payment
of duty may be brought
back to the Unit in the following
cases,
(a) Where a Domestic Tariff
Area buyer fails
to take delivery of the goods due to change in fashion,
change in market
conditions, or default
in conditions of agreement relating to the sale, such duty paid goods shall be brought back by the Unit within thirty days from the date of clearance from the SEZ Unit subject to the condition that,
(i) the identity
of the goods is established to the satisfaction of the Specified
Officer;
(ii) the Unit provides evidence, to the
satisfaction of the Specified Officer,
that no benefits including
input tax credit
have been availed
by the Domestic Tariff Area buyer who has failed
to take delivery
of the goods; and
(iii) a separate
inventory of such returned goods is maintained
by the Unit in auditable
format;
(b) the Units are permitted to re-sell the said goods without any alteration of the original
condition of the goods, in the Domestic
Tariff Area either
to the same buyer or to different buyer on payment
of applicable duty under section
30 of the Act as if it is a fresh sale in the Domestic Tariff Area;
(c) the refund of duty paid at the time of original
clearance shall be made with the appropriate authority in accordance with sub-rule (5) of rule 47 and the refund
of duties on goods so received back shall be in terms of the provisions of the Customs Act, 1962;
(d) in cases where repairs
are to be carried out on the goods supplied
by a Unit to the Domestic Tariff
Area on payment of applicable duties, such goods shall be brought back to the Unit for the purpose
of repair within
a period of six months from the date of clearance or within
such period as may be extended by the Specified
Officer or within the warranty
period whichever is later, on payment
of duty on the value of repairs
subject to the condition that the identity
of the goods is established to the satisfaction of the Specified
Officer.".
[F. No. K-43014/11/2024-SEZ]