Goods moved from SEZs to domestic mkts treated as imports; duty drawback applicable on re-exports

The government has clarified that when goods are supplied from SEZ units to the domestic market after paying applicable duties and later re-exported, they will be treated as imported goods for the purposes of disbursement of duty drawback.

The instruction clarifies that goods supplied by an SEZ unit to the Domestic Tariff Area (DTA) after payment of customs duties will be treated as imported goods if later re-exported. According to an instruction of the CBIC to customs authorities, 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 Customs law.

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 74 of the Customs Act, 1962.

"...it is hereby clarified that in cases where goods are cleared into DTA from Special Economic Zone (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," the CBIC said on Tuesday.