SC says no to customs duty on DTA trade with SEZs.

New Delhi: The government’s bid to levy export duty on goods supplied to special economic zones (SEZs) from the rest of the country was rejected on Monday with the Supreme Court saying that the extant law does not permit such a levy. Currently, sales by SEZ units to domestic tariff area (DTA) are subject to customs duty as SEZs are designated tax-free zones with an obligation to be net forex earners. Although there is no provision in the law for a levy on the reverse sale, the customs authorities have started demanding a tax.

Dismissing the government’s special leave petition, the SC held that export duty on sales to SEZs was unjustified in the absence of any specific law. An SC bench upheld the Gujarat High Court judgment that companies were not liable to pay duty in the absence of any specific provisions under the SEZ Act, 2005.

Source : Financial Express