Rule 42 - Procedure for sub-contracting in Domestic Tariff Area or in a Unit in other Special Economic Zones or in Export Oriented Unit or in Electronic Hardware Technology Park unit or in Software Tech........

Sub-contracting permission in Special Economic Zones allows duty-free outward processing subject to prescribed permissions, safeguards, and return timelines.

Rule 42 permits Units to send goods to subcontractors in the Domestic Tariff Area, other SEZs, EOUs or specified parks for processing duty free subject to prior permission (preferably at project approval) or subsequent application with subcontractor details and self-certified input-output ratios. Specified Officers may grant annual permission; bank guarantees may be required to cover duty foregone except where exemptions apply. Movement requires preauthenticated serially numbered challans, identification mark recording and possible random checks; goods must be returned within prescribed periods or duty recovery will follow. Direct export from subcontractor premises, waste disposal, intra-SEZ transfers and developer/contractor obligations are governed by the same framework.