Govt Likely to Tweak SEZ Rules to Ease DTA Sales

The commerce department and the finance ministry are currently engaged in consultation to allow the sale of products manufactured in Special Economic Zones (SEZs) to the domestic market on a "duty foregone basis" on raw materials, instead of the finished product, a person aware of the matter said.

- SHREYA NANDI

At present, SEZs pay full customs duty in case a finished product is sold outside these zones, known as domestic tariff area (DTA). Based on the industry's longstanding request, the commerce department has proposed to the ministry of finance to calculate the duty on the imported raw material instead.

The change, if implemented, is expected to spur value addition and manufacturing in SEZs as the import tax levies on units are expected to lower. Manufacturers in SEZs that have spare capacity will be able to boost production.