In a significant move to ease operational bottlenecks for Special Economic Zone (SEZ) units supplying into the domestic market, the Ministry of Commerce and Industry (Department of Commerce), Government of India, has notified the Special Economic Zones (Third Amendment) Rules, 2026 vide Notification No. G.S.R. 893(E) dated October 15, 2026 (F. No. K-43014/11/2024-SEZ).
Issued in exercise of the powers conferred by Section 55 of the Special Economic Zones Act, 2005 (28 of 2005), the amendment substitutes sub-rule (2) of Rule 49 of the Special Economic Zones Rules, 2006. While the earlier provision primarily addressed bringing back goods from the Domestic Tariff Area (DTA) for repair, the substituted sub-rule establishes a clear, four-part statutory framework enabling SEZ units to bring back undelivered duty-paid goods from the DTA, re-sell returned goods without alteration, claim refunds of original duties paid, and receive goods back for post-sale repairs.
Below is our complete regulatory breakdown of the amended provisions, statutory timelines, and compliance checkpoints for SEZ units.
Regulatory Notification at a Glance
| Parameter | Official Gazette Details |
| Short Title | Special Economic Zones (Third Amendment) Rules, 2026 |
| Notification No. & Date | G.S.R. 893(E) dated 15 October 2026 |
| File Reference & Signatory | F. No. K-43014/11/2024-SEZ | Vimal Anand, Joint Secretary |
| Issuing Authority | Department of Commerce, Ministry of Commerce and Industry |
| Statutory Power | Section 55 of the Special Economic Zones Act, 2005 (28 of 2005) |
| Provision Amended | Substitution of sub-rule (2) in Rule 49 of the SEZ Rules, 2006 |
| Effective Date | 15 October 2026 (Date of publication in the Official Gazette) |
| Principal Rules Reference | Published vide G.S.R. 54(E) dated 10 February 2006; last amended vide G.S.R. 609(E) dated 9 July 2026 |
The Four Core Provisions of Substituted Rule 49(2)
Under the substituted Rule 49(2), goods supplied by an SEZ Unit into the Domestic Tariff Area (DTA) on payment of duty may be brought back to the Unit under four specific regulatory clauses:
A. Clause (a): Bring-Back of Goods Where DTA Buyer Fails to Take Delivery
Where a Domestic Tariff Area buyer fails to take delivery of the goods due to:
- Change in fashion;
- Change in market conditions; or
- Default in conditions of the agreement relating to the sale,
such duty-paid goods shall be brought back by the SEZ Unit within 30 days from the date of clearance from the SEZ Unit, subject to satisfying three mandatory conditions:
- Sub-clause (i) – Identity Verification: The identity of the goods is established to the satisfaction of the Specified Officer.
- Sub-clause (ii) – Proof of Non-Availment of Benefits / ITC: The Unit provides evidence, to the satisfaction of the Specified Officer, that no benefits – including Input Tax Credit (ITC) – have been availed by the DTA buyer who failed to take delivery of the goods.
- Sub-clause (iii) – Separate Auditable Inventory: A separate inventory of such returned goods is maintained by the Unit in an auditable format.
B. Clause (b): Re-Sale of Returned Goods in the DTA
- SEZ Units are permitted to re-sell the returned goods without any alteration of the original condition of the goods in the Domestic Tariff Area.
- The re-sale may be made either to the same buyer or to a different buyer on payment of applicable duty under Section 30 of the SEZ Act, 2005, treated as if it is a fresh sale in the Domestic Tariff Area.
C. Clause (c): Refund of Duty Paid at Original Clearance
- The refund of duty paid at the time of original clearance shall be made with the appropriate authority in accordance with sub-rule (5) of Rule 47 of the SEZ Rules, 2006.
- Further, the refund of duties on the goods so received back shall be governed in terms of the provisions of the Customs Act, 1962.
D. Clause (d): Bring-Back of Duty-Paid DTA Goods for Repairs
- Where repairs are to be carried out on goods supplied by an SEZ Unit to the DTA on payment of applicable duties, such goods shall be brought back to the Unit for the purpose of repair within:
- 6 months from the date of clearance; or
- Such period as may be extended by the Specified Officer; or
- The warranty period, whichever is later.
- Upon re-clearance after repair, duty is payable on the value of repairs, subject to the condition that the identity of the goods is established to the satisfaction of the Specified Officer.
Compliance Comparison: Undelivered Goods Return vs. Return for Repairs
| Compliance Parameter | Undelivered Goods Return [Rule 49(2)(a)-(c)] | Return for Repairs [Rule 49(2)(d)] |
| Permitted Grounds | Change in fashion, change in market conditions, or default in sale agreement conditions. | Post-sale repair or warranty servicing requirements. |
| Statutory Time Limit | Within 30 days from the date of clearance from the SEZ Unit. | Within 6 months from clearance, extended period by Specified Officer, or warranty period (whichever is later). |
| Alteration Permitted? | No. Must be re-sold without any alteration of the original condition. | Yes. Repair operations are permitted. |
| Duty & Refund Mechanism | Refund of original duty via Rule 47(5) and the Customs Act, 1962; fresh duty under Section 30 upon DTA re-sale. | Duty payable only on the value of repairs. |
| Mandatory Conditions | Identity established before Specified Officer, proof of non-availment of ITC/benefits by buyer, and separate auditable inventory. | Identity of the goods established to the satisfaction of the Specified Officer. |
MCS Advisory: Action Checklist for SEZ Units
- 30-Day Clearance Monitoring: Logistics and EXIM teams in SEZ units must track undelivered DTA consignments from the exact date of clearance from the SEZ unit so that physical re-entry occurs strictly within the 30-day statutory window.
- Non-Availment of ITC Evidence: Obtain a formal non-availment declaration from the DTA buyer along with GST portal/GSTR-2B verification to demonstrate to the Specified Officer that no Input Tax Credit or other benefits were claimed.
- Auditable Returned-Goods Register: Maintain a dedicated, auditable inventory log in your ERP system linking the original DTA invoice, Bill of Entry, gate return records, physical storage batch, and subsequent fresh DTA sale under Section 30.
- Rule 47(5) Refund Synchronisation: Align original duty refund filings under Rule 47(5) of the SEZ Rules, 2006 and the Customs Act, 1962 immediately upon verified re-entry of the returned goods.
Frequently Asked Questions (FAQs)
Notified vide G.S.R. 893(E) dated October 15, 2026, the amendment substitutes sub-rule (2) of Rule 49 of the Special Economic Zones Rules, 2006. It establishes a formal statutory mechanism for SEZ units to bring back undelivered duty-paid goods from the DTA, re-sell them without alteration, claim duty refunds, and bring back goods for repairs.
Under Rule 49(2)(a), where a DTA buyer fails to take delivery due to a change in fashion, change in market conditions, or default in the sale agreement, the duty-paid goods must be brought back within 30 days from the date of clearance from the SEZ unit.
No. Under Rule 49(2)(b), returned goods must be re-sold without any alteration of the original condition of the goods, either to the same buyer or to a different buyer, on payment of applicable duty under Section 30 of the SEZ Act, 2005 as a fresh DTA sale.
Under Rule 49(2)(c), the refund of duty paid at the time of original clearance is processed with the appropriate authority in accordance with Rule 47(5) of the SEZ Rules, 2006, and the refund of duties on the goods received back is governed by the provisions of the Customs Act, 1962.
Under Rule 49(2)(d), duty-paid goods supplied to the DTA can be brought back for repair within 6 months from the date of clearance, within such period as extended by the Specified Officer, or within the warranty period, whichever is later. Duty is payable only on the value of repairs.
Need Assistance with SEZ Compliance, DTA Clearances, or Rule 47(5) Duty Refunds?
Reach out to the SEZ & Customs Advisory Practice at Mundhra Consulting Services LLP (MCS)
Also Read: India-New Zealand FTA Customs Duty Concessions Notified: CBIC Notification No. 32/2026
