Indirect Tax Laws and Practice · Special Economic Zone Scheme

Customs Procedures in SEZ: Import, Export and DTA Sales

Updated 11 October 2026 · Fact-checked

Goods imported into an SEZ for authorised operations are exempt from customs duty, and DTA goods brought in are exempt from excise duty, subject to conditions under Section 26(2). Exports from an SEZ are exempt from customs duty. Goods removed to the DTA are charged customs duty as if imported, at the rate on the date of removal (Section 30).

Understand Customs Procedures in SEZ: Import, Export and DTA Sales

Think of an SEZ as a part of India that customs treats like a foreign country. That is why the Act defines import and export in an unusual way. The Act sets the principle. The detailed procedure sits in the rules made under it.

Under Section 2(m), export covers three things: taking goods or services out of India from an SEZ, supplying them from the Domestic Tariff Area (DTA) to a Unit or Developer, and supplying them from one Unit to another Unit or Developer, in the same or a different SEZ. Under Section 2(o), import means a Unit or Developer bringing goods or receiving services from outside India, or receiving them from another Unit or Developer. The DTA is the whole of India, including territorial waters and continental shelf, but not the SEZ areas (Section 2(i)).

Section 26(1) gives the benefits. A Developer or entrepreneur gets exemption from customs duty on goods imported into, or services provided in, the SEZ or Unit for authorised operations. Exports from the SEZ to any place outside India are also exempt from customs duty. Goods brought from the DTA into an SEZ or Unit to carry on authorised operations are exempt from excise duty (Section 26(1)(c)). Drawback or other benefits are available as admissible from time to time on goods or services brought from the DTA, and on services provided in the SEZ or Unit by service providers located outside India, to carry on authorised operations (Section 26(1)(d)). Section 26(2) lets the Central Government prescribe the manner and the terms and conditions for all these benefits. So these exemptions are conditional, not automatic.

The reverse flow is taxed. Under Section 30, goods removed from an SEZ to the DTA are chargeable to customs duties as leviable on such goods when imported. This includes anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975, where applicable. The conditions come from the rules made by the Central Government.

Supplies from one Unit to another Unit or Developer, and from the DTA to a Unit or Developer, are exports under Section 2(m). Receipt by a Unit or Developer from another Unit or Developer is an import under Section 2(o)(ii). Section 2(o) does not treat receipt from the DTA as an import. The documents and procedure for each movement are as prescribed in the rules made under the Act. Learn the principle from the Act and the procedure from the rules.

Key rules to remember

Duty on DTA clearance: Customs duty = duties as leviable on the goods when imported, applied on the value of the goods removed; Section 30(a). Includes anti-dumping, countervailing and safeguard duties where applicable. Subject to conditions in the rules.
Rate and valuation date: Rate of duty and tariff valuation = those in force on the date of removal from the SEZ; Section 30(b). If the date of removal cannot be ascertained, use the date of payment of duty.
Meaning of export in SEZ Act: Export = (i) SEZ to outside India, or (ii) DTA to Unit/Developer, or (iii) Unit to another Unit/Developer; Section 2(m). Supply from DTA to a Unit is an export even though goods do not leave India.
Meaning of import in SEZ Act: Import = (i) from outside India into SEZ by Unit/Developer, or (ii) receipt from another Unit/Developer; Section 2(o). Receipt from another Unit counts as import.
Core exemptions: Section 26(1): no customs duty on imports for authorised operations and on exports from SEZ; no excise duty on DTA goods brought in; Manner and conditions are prescribed under Section 26(2).

How to solve Customs Procedures in SEZ: Import, Export and DTA Sales questions

Use this order for any SEZ customs question, whether it is a case or a duty computation.

1Identify the movement: from abroad into the SEZ, from the SEZ abroad, DTA to SEZ, SEZ to DTA, or Unit to Unit.
2Apply the Section 2 definitions. DTA to Unit and Unit to Unit are exports. Receipt from another Unit is import.
3Decide whether the benefit under Section 26(1) applies and remember it is subject to the rules under Section 26(2) and to authorised operations.
4If goods go to the DTA, treat them as imported goods under Section 30(a). List the duties: basic customs duty, any anti-dumping, countervailing or safeguard duty, and other levies stated in the question.
5Fix the date of removal for the rate and tariff valuation under Section 30(b). Use the date of payment only if the removal date is not ascertainable.
6Compute duty on the value given, using the rate on that date and not any earlier or later rate.
7Name the document used (bill of entry or shipping bill) only if the question asks, and state any condition as coming from the rules.
8Write a clear conclusion: dutiable or exempt, amount, and the reason.

Quickest way: Direction-and-date shortcut

When to use it: Use for MCQs and short numerical questions where you must decide quickly whether duty arises and at what rate.

Ask: does the goods movement end in the DTA? If no, duty is normally exempt under Section 26, subject to the rules.
If yes, say import-equivalent duty applies under Section 30(a).
Pick the rate on the removal date. Ignore the date of purchase, production or order.
Add only the extra duties the question mentions, such as anti-dumping or safeguard duty.
If DTA to Unit or Unit to Unit is mentioned, label it as export under Section 2(m) and move on.

Common mistakes in Customs Procedures in SEZ: Import, Export and DTA Sales

Treating a DTA supply to an SEZ Unit as a domestic sale only.
Goods stay within India, so it feels domestic.
Fix: Section 2(m)(ii) defines supply from the DTA to a Unit or Developer as export. Say so in your answer.
Using the rate of duty on the date the goods were imported into the SEZ when they are cleared to the DTA.
Students link duty to the original import date.
Fix: Section 30(b) fixes the rate and tariff valuation at the date of removal from the SEZ. Use the date of payment only if that date cannot be found.
Forgetting anti-dumping, countervailing and safeguard duties on DTA clearance.
Students stop at basic customs duty.
Fix: Section 30(a) includes them where applicable as leviable on such goods when imported. Check the question for these duties.
Saying SEZ exemptions are unconditional.
Section 26 reads like a blanket exemption.
Fix: Section 26(1) is subject to sub-section (2), so the manner and conditions are prescribed. Also, imports must be for authorised operations.
Treating movement between two Units as outside customs.
It looks like an internal transfer.
Fix: Unit-to-Unit supply is export for the supplier and import for the receiver under Sections 2(m)(iii) and 2(o)(ii), even within the same SEZ.
Quoting section numbers for the detailed forms or procedures.
Students mix the Act with the SEZ Rules.
Fix: The Act gives principles and the rules give procedure. Quote Section 30 for duty and refer to the rules for the forms.

Worked examples

Example 1

A Unit in an SEZ removes finished goods of assessable value ₹10,00,000 to the DTA. Basic customs duty as leviable on such goods when imported is 10%. No other duty applies. The rate was 12% on the date the goods were manufactured and 10% on the date of removal. Compute the customs duty.

Show the solution

Goods move from the SEZ to the DTA, so Section 30(a) applies and duty is charged as if the goods were imported.
Section 30(b) says the rate in force on the date of removal applies.
The rate on the date of removal is 10%. The 12% rate on the manufacture date is irrelevant.
Duty = 10% × ₹10,00,000 = ₹1,00,000.

Answer: Customs duty is ₹1,00,000.

Example 2

State with reasons whether each of the following is an export or an import under the SEZ Act, 2005: (a) a DTA supplier sends machinery to an SEZ Unit; (b) Unit A in an SEZ supplies components to Unit B in a different SEZ.

Show the solution

For (a), Section 2(m)(ii) covers supplying goods from the DTA to a Unit or Developer. This is an export by the DTA supplier.
For the Unit receiving the machinery, Section 2(o) does not treat the receipt from the DTA as an import. It covers only receipt from a place outside India and receipt from another Unit or Developer. So only the DTA supplier's supply is an export, under Section 2(m)(ii).
For (b), Section 2(m)(iii) covers supply from one Unit to another Unit, in the same or a different SEZ. This is an export by Unit A.
Under Section 2(o)(ii), receipt by Unit B from another Unit of a different SEZ is an import by Unit B.

Answer: (a) Export by the DTA supplier under Section 2(m)(ii). The receiving Unit's receipt from the DTA is not an import under Section 2(o). (b) Export by Unit A and import by Unit B. Exemptions apply subject to the rules under Section 26(2).

Exam tips

In MCQs, watch the direction of movement. Duty arises on SEZ to DTA, not on DTA to SEZ.
In numericals, find the removal date first. The question often gives several dates and rates to test Section 30(b).
Write the section number with each point: Section 2(m) and 2(o) for definitions, Section 26 for exemptions, Section 30 for DTA duty.
For procedure points like bill of entry or shipping bill, answer in general terms and say conditions are as prescribed in the rules.
In case questions, give a clear conclusion on whether duty is payable, followed by the calculation.

Practice questions from Special Economic Zone Scheme

Customs Procedures in SEZ: Import, Export and DTA Sales: frequently asked questions

How is duty on a DTA sale from an SEZ unit calculated?

Goods removed to the DTA are charged customs duty as leviable on such goods when imported, including anti-dumping, countervailing and safeguard duties where applicable. The rate and tariff valuation are those in force on the date of removal. Apply them to the value given in the question.

Which date decides the rate of duty on DTA clearance?

The date of removal from the SEZ decides it. If that date cannot be ascertained, the date of payment of duty is used. This is in Section 30(b).

Is a supply from the DTA to an SEZ Unit an export?

Yes. Section 2(m)(ii) defines export to include supplying goods or services from the DTA to a Unit or Developer. This is why such supplies get export-type benefits, subject to the rules.

Where do I find the detailed forms for SEZ imports and exports?

They are in the rules made under the Act, not in the Act itself. Section 26(2) and Section 30 refer to conditions in rules made by the Central Government. For the exam, state the principle from the Act and mention that procedure is as prescribed.