The Ministry of Commerce and Industry, Department of Commerce, has notified the Special Economic Zones (Third Amendment) Rules, 2026, through Notification No. G.S.R. 893(E), dated 15 October 2026, amending Rule 49(2) of the Special Economic Zones Rules, 2006. The amendment, issued in exercise of the powers conferred under Section 55 of the Special Economic Zones Act, 2005, lays down provisions governing the return, resale, refund of duties and repair of goods supplied by Special Economic Zone (SEZ) units to the Domestic Tariff Area (DTA) on payment of applicable duties. The amended rules came into force on the date of their publication in the Official Gazette.
Under the revised provisions, SEZ units are permitted to receive back duty-paid goods supplied to the Domestic Tariff Area where the DTA buyer fails to take delivery due to changes in fashion, changes in market conditions or default in the conditions of an agreement relating to the sale. Such goods must be brought back to the SEZ unit within 30 days from the date of clearance. This provision establishes a defined mechanism for handling goods that remain undelivered due to specified commercial circumstances.
The return of such goods is subject to prescribed safeguards. The identity of the goods must be established to the satisfaction of the Specified Officer. The SEZ unit must also provide evidence that the DTA buyer has not availed any benefits, including input tax credit, in respect of the goods for which delivery was not taken. Additionally, the unit is required to maintain a separate inventory of the returned goods in an auditable format to ensure proper documentation and verification.
The amendment further permits SEZ units to resell the returned goods in the Domestic Tariff Area, either to the original buyer or to another buyer, provided the goods remain in their original condition without any alteration. Such resale will be treated as a fresh sale in the Domestic Tariff Area and will be subject to payment of applicable duties under Section 30 of the Special Economic Zones Act, 2005. This provision enables SEZ units to undertake resale of returned goods while complying with the applicable duty requirements.
With regard to the refund of duties, the amended rules provide that the refund of duty paid at the time of original clearance shall be dealt with by the appropriate authority in accordance with Rule 47(5) of the Special Economic Zones Rules, 2006. The refund of duties on goods received back by SEZ units will be governed by the relevant provisions of the Customs Act, 1962. These provisions establish the applicable framework for processing duty refunds in cases involving returned goods.
The notification also specifies the conditions for the return of goods to SEZ units for repair. Goods originally supplied to the Domestic Tariff Area on payment of applicable duties may be brought back to the SEZ unit for repairs within six months from the date of clearance, within an extended period permitted by the Specified Officer, or within the warranty period, whichever is later. Such return will be subject to payment of duty on the value of repairs and establishment of the identity of the goods to the satisfaction of the Specified Officer.
The amended provisions provide a regulatory framework for SEZ units to manage returned and repairable goods supplied to the domestic market, while incorporating safeguards relating to identification of goods, prevention of unintended tax benefits, maintenance of auditable records and payment of applicable duties. The changes are expected to facilitate greater operational flexibility in dealing with undelivered goods, resale transactions and repair-related returns, subject to compliance with the prescribed conditions.
The Special Economic Zones (Third Amendment) Rules, 2026, notified vide G.S.R. 893(E), dated 15 October 2026, substitute sub-rule (2) of Rule 49 of the Special Economic Zones Rules, 2006. The principal rules were originally notified through G.S.R. 54(E), dated 10 February 2006, and were last amended through G.S.R. 609(E), dated 9 July 2026, prior to the present amendment.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/Special-Economic-Zones-Third-Amendment-Rules-2026.pdf
