Special Economic Zones Rules, 2006

Chapter 4
Terms and conditions subject to which entrepreneur and developer shall be entitled to exemptions, drawbacks and concessions

27. Import and Procurement. - 

 *(1) A Unit or Developer may import or procure from the  Domestic  Tariff  Area  without  payment  of  duty, taxes  or cess  or procure from Domestic Tariff Area after availing export entitlements or procure from other Units in  the  same or  other Special  Economic  Zone  or from  Export Oriented Unit or Software Technology Park unit or Electronic Hardware Technology Park unit or Bio- technology Park  unit, ⁴[or warehouse]  all type of goods,  including capital goods  (new or  second hand),  raw  materials,  semi-finished  goods,  (including  semi-finished  Jewellery) component, consumables, spares   goods and   materials for making capital goods required for authorized operations except prohibited items under  the Import Trade Control (Harmonized System) Classifications of Export and Import Items.

¹[Provided that exemptions from payment of duty, taxes or cess, drawbacks and concessions on all types of goods and services, required for setting up and maintenance of the factory building, allowed to a unit shall also be available to the contractors ⁵[including sub-contractors] appointed by such unit and all the documents in such cases shall bear the name of the unit along with the contractor and these shah be filed jointly in the name of the unit and the contractor: .

Provided further that the unit shall be responsible and liable for proper utilization of such goods and services in all cases.]

³[Provided also that items prohibited for import can be procured by a Special Economic Zone unit or Developer from a place outside India to the Special Economic Zone with the prior approval of Board of Approval.]

⁶[Provided also that for supply of Restricted Items by a Domestic Tariff Area Unit to Special Economic Zone Developer or Unit, the Domestic Tariff Area Unit may supply such items to a Special Economic Zone Developer or Unit for setting up infrastructure facility or for setting up of a Unit and it may also supply raw material to Special Economic Zone Unit for undertaking a manufacturing operation except refrigeration, cutting, polishing and blending, subject to the prior approval of Board of Approval:
Provided also that supplies from Domestic Tariff Area to Special Economic Zones shall attract export duty, in case, export duty is leviable on items attracting export duty]

(2)  In case of any doubt as to whether any goods or services are required by a Unit or   Developer   for   authorized  operations   or  not,  it  shall   be  decided  by   the Development Commissioner.

(3)  The  import  of ⁷[and domestic procurement]  duty  free  material  for  setting  up educational  institutions, hospitals,  hotels,  residential  and/or  business  complex,  leisure  and  entertainment facilities or any other facilities in the non-processing area of the Special Economic Zone shall be as approved by the ⁸[Approval Committee and import and procurement of goods from Domestic Tariff Area] Old [Board and import] of no duty free material shall be permitted for operation and maintenance of such facilities:

Provided further that any goods for the personal use of, or consumption by officials, workmen, staff, owners or any other person in relation to a Unit or Developer, shall not be eligible for exemptions, drawbacks and concessions or any other benefit in accordance with the provisions of sections 7 or 26.

(4)   A   Unit or Developer may also source capital goods, without payment of duty, taxes  or  cess  from a domestic  or  foreign leasing company, under a  valid lease agreement and in such cases the Unit   or Developer and the domestic or foreign leasing company shall jointly file documents for import or domestic   procurement, as the case may be.

(5)  A  Unit may import or procure from Domestic Tariff Area, all types of goods and services, without payment of duty, taxes of cess for creating a central facility for use by Units in Special Economic Zone and where  such facility is  created for software development, the same may also  be accessed by software exporters of Domestic Tariff Area.

(6)   A  gem and jewellery Unit may also source on outright purchase basis or loan basis, gold or silver or platinum through the Nominated Agencies ⁹[or free of charge from foreign buyer and Export thereof to the same foreign buyer] and where such sourcing is on loan basis, the same shall be subjected to the conditions applicable to such transactions under the  provisions of the  Foreign Trade Policy in force:

Provided that the conditions applicable to loan transaction shall not apply where the Unit converts such loan into outright purchase by paying the outstanding loan amount and interest within the period for export prescribed under the Foreign Trade Policy applicable to the loan transaction.

(7) The goods already imported or shipped or arrived before the issue of Letter of Approval  shall  be  eligible  for  duty free  clearance  provided customs  duty has  not been paid and goods have not been cleared from Customs or cleared and placed in the Bonded Warehouses.

(8) No import or export of rough diamonds shall be permitted unless the shipment parcel is accompanied by Kimberley Process Certificate issued by the Development Commissioner.

(9)   Where goods or parts thereof, imported or procured from Domestic Tariff Area are found to be defective or otherwise unfit for use or which have been damaged or become  defective  after  such  import  or  procurement,  may be  sent outside the Special Economic Zone without payment of duty for repairs or replacement, to the supplier or his authorized dealer or be destroyed:

Provided  that  where overseas  supplier  or  the Domestic  Tariff Area supplier  of goods does not insist for re-export or for supply back to the Domestic Tariff Area of goods, the same shall not be insisted upon and such goods shall be destroyed with the permission of the Specified Officer:

²[Provided further that the goods which are sent outside the Special Economic Zone for repairs are returned to the Special Economic Zone, within 180 days from the date of removal from the Special Economic Zone, under intimation to the specified officer. In case goods are sent out for replacement then on replaced goods, no Duty Entitlement Passbook Scheme, duty drawback or other export incentives shall be claimed for this purpose.]

Provided  further  that  destruction  shall not  be permitted in case of precious  and semi-precious stones and precious metals:

Provided  also  that in  case  of return of  goods  procured from the Domestic Tariff Area, the same shall be allowed   on   refund of the export entitlement which have been    received or availed or claimed  by the Domestic  Tariff Area supplier or  the Unit or the Developer, as the case may be.

(10).   The Assessment of imports and domestic procurement by a Developer or a Unit, shall be on the basis of self-declaration and shall not be subjected to routine examination   except   in case of procurement from the Domestic Tariff Area under the claim of  export entitlements:

Provided  that  where  based  on  a  prior  intelligence  the  examination  becomes necessary the same shall be carried out by the Authorized Officer(s) after obtaining written permission from the Development Commissioner or the Specified Officer.

(11)   If examination of any import or export of goods or goods procured from the Domestic  Tariff  Area  is  required, the  same  shall be  carried  out at  the Special Economic Zone   gate or if the same is not possible,  in an area so notified by the Specified Officer for this purpose,   and no examination shall be carried out in the premises  of  the  Unit  unless  requested  by  the  unit  and  specifically  permitted in writing by the Specified Officer.

1. Substituted vide Notification Dated 16/3/2007

2. Inserted vide Notification Dated 03/08/2009

3. Inserted vide Notification Dated 07/09/2010
4. Inserted vide Notification dated 19/09/2018
5. Inserted vide Notification dated 19/09/2018
6. Inserted vide Notification dated 19/09/2018
7. Inserted vide Notification dated 19/09/2018
8. Subsituted vide Notification dated 19/09/2018
9. Inserted vide Notification dated 05/02/2024