Domestic sale relief for SEZ units will be a one-time window: Revenue Secy

The relaxation on domestic sales for special economic zone (SEZ) units proposed in the Budget will be a "limited-time window" to help these export-oriented enterprises tide over global uncertainties, Revenue Secretary Arvind Shrivastava said on Monday.

"SEZs' focus is exports, and that will continue to remain as exports. Therefore, this window being created is expected to be a one-time, limited-time frame window, and we hope, during this period, the various uncertainties and volatilities of the international trade will also pass over, and we will be in a position to get back stability on that front too," the secretary said at a CII post-Budget interaction here.

 

To address concerns arising about the utilisation of capacities by manufacturing units in the SEZs due to global trade disruptions, Finance Minister Nirmala Sitharaman, in her Budget speech, proposed a "special one-time measure" to facilitate sales by eligible manufacturing units in SEZs to the DTA (domestic tariff area) at concessional rates of duty.

The quantity of such sales will be limited to a prescribed proportion of their exports, she said.

Necessary regulatory changes will be undertaken to operationalise these measures, while ensuring a level-playing field for units working outside these zones.

The revenue secretary said that details to implement the proposal will be worked out, and it would be in the form of an exemption notification under the Customs Act.

"We have to ensure there is a level playing field where duty doesn't become a deterrent for SEZs to sell in DTAs, at the same time, the treatment of duty should not be the one which results in non-level playing for DTAs.

"At the end, this balance should be exercised, and we are going to work on finding a good formula for that. SEZs' focus is exports and that will continue to remain as exports," Shrivastava said.