Whalesbook
The government recently allowed Special Economic Zone (SEZ) units to sell goods in the Domestic Tariff Area (DTA) at concessional duty rates. This move was intended to improve utilization levels and offer flexibility amid weak global demand. However, the relief was introduced as a one-time measure, restricted to a single fiscal year, and capped such sales at 30% of the highest annual exports from the preceding three financial years.
Limited Scope of Concessions
Analysis from the Export Promotion Council for EOUs and SEZs, presented to the Commerce Department, shows a significant portion of SEZ-manufactured goods are not covered by these duty concessions. This severely limits the relief's practical use. Data suggests nearly 80% of supplies gain no real benefit, with about 13% receiving only a small 1% duty concession. Industry representatives argue that without wider coverage and larger concessions, the measure risks being largely symbolic and won't offer significant relief.
Industry Recommendations
The council has asked the government to raise the DTA sales limit to 50%, from the current 30%. They also seek a two-to-three-year extension to provide much-needed certainty for production and inventory planning. Further recommendations include clearer customs guidelines to avoid procedural delays and a streamlined process for obtaining certificates from development commissioners. The council suggested processing these requirements once, rather than for each shipping bill, and called for an online facility for remote SEZ units.