SPECIAL FISCAL PROVISIONS FOR SPECIAL ECONOMIC ZONESCentral

Section 30 of The Special Economic Zones Act, 2005

Subject to the conditions specified in the rules made by the Central Government in this behalf,--

(a)any goods removed from a Special Economic Zone to the Domestic Tariff Area shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975 (51 of 1975), where applicable, as leviable on such goods when imported; and
(b)the rate of duty and tariff valuation, if any, applicable to goods removed from a Special Economic Zone shall be at the rate and tariff valuation in force as on the date of such removal, and where such date is not ascertainable, on the date of payment of duty.

Summary

This section explains the rules for taxing goods that move from a Special Economic Zone into the rest of the country.
Goods taken out of a zone and brought into the Domestic Tariff Area are taxed as if they were being imported into India from a foreign country.
These goods are subject to standard customs duties as well as special taxes like anti-dumping, countervailing, and safeguard duties.
The tax rate and the value of the goods are determined by the laws active on the day the goods are removed from the zone.
If the specific date the goods left the zone is unknown, the tax rate active on the day the duty is paid will be used instead.
All of these requirements depend on specific rules set by the Central Government.

Practical examples

1Sunita runs a factory that makes high-end speakers inside a Special Economic Zone. On November 5, 2024, she sends a shipment of 200 speakers to a retail chain in Mumbai. Because Mumbai is part of the Domestic Tariff Area, Sunita must pay customs duties on those speakers just as if she were importing them from Germany.

2A computer hardware unit in a Kochi zone moves a shipment of motherboards to a local buyer on March 10. The government increased the customs duty rate on March 9. The unit must pay the higher new tax rate because it was the rate in effect on the day the goods were removed from the zone.

FAQ

1. What taxes apply when goods are moved from a zone to the rest of India under Section 30 of the Special Economic Zones Act, 2005?

Under Section 30 of the Special Economic Zones Act, 2005, any goods moved from a zone to the Domestic Tariff Area are charged customs duties, including anti-dumping and safeguard duties, as if they were being imported from abroad.

2. How is the duty rate calculated for domestic sales under Section 30 of the Special Economic Zones Act, 2005?

Per Section 30 of the Special Economic Zones Act, 2005, the rate of duty is based on the rate in force on the date the goods are removed from the zone.

3. What happens if the removal date of goods is not known under Section 30 of the Special Economic Zones Act, 2005?

If the date of removal cannot be determined, Section 30 of the Special Economic Zones Act, 2005 requires the tax rate to be based on the date the duty is actually paid.

4. Does Section 30 of the Special Economic Zones Act, 2005 involve the Customs Tariff Act?

Yes, Section 30 of the Special Economic Zones Act, 2005 states that duties like anti-dumping and countervailing measures are applied according to the Customs Tariff Act, 1975.

Test yourself

Q1.Under Section 30 of The Special Economic Zones Act, 2005, how are goods treated when moved from a zone to the Domestic Tariff Area?

Q2.According to Section 30 of The Special Economic Zones Act, 2005, which date determines the rate of duty?

Q3.Under Section 30 of The Special Economic Zones Act, 2005, which types of duties may be charged on these goods?

Q4.If the date of removal is unknown, what date is used under Section 30 of The Special Economic Zones Act, 2005?

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