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SEZ Re-exports: Drawback Clarity for Exporters
28 Apr
Summary
- Re-exported SEZ goods supplied to DTA treated as imports.
- Drawback claims under Section 74 of Customs Act clarified.
- Clarification ensures uniform practices and reduces litigation.
The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification impacting the disbursement of duty drawback for re-exported goods. Goods supplied by an SEZ unit to the Domestic Tariff Area (DTA) after paying applicable customs duties will be considered imported goods if they are later re-exported.
This clarification addresses divergent practices observed by auditors in processing duty drawback claims under Section 74 of the Customs Act. Previously, some customs formations denied drawback, not treating SEZ to DTA clearances as imports. The CBIC instruction mandates that such duty-paid goods, when re-exported, are eligible for drawback.
Industry experts, including GTRI and FIEO, have lauded this move as a welcome step that removes ambiguity and promotes fairness. The clarification is expected to bring uniformity in customs procedures, reduce litigation, and significantly support the cash flow and liquidity of exporters and DTA buyers. It ensures that duties paid on goods are not indefinitely locked when the same identifiable items are exported again.
