Drawback benefits for DTA supplies to SEZ units

[Swagath S]

Dear Sir,

Rule 24 of SEZ Rules provides for drawback benefits to supplies by DTA unit to SEZ units.

Further, Rule 30 of SEZ Rules, provides for procedures for supplies from DTA unit to SEZ unit which also prescribes that the payment for such supply shall be received from foreign currency account.

As per the above, can drawback be claimed even though the payment from the SEZ unit is received in INR. ?

Whether it can be argued that requirement of payment in foreign currency is procedural in nature and is condonable.??

Thank you

Regards

Swagath S

AI Summary

Drawback benefits for DTA to SEZ supplies require foreign currency payment; INR payment disqualifies export incentives. A query was raised about whether drawback benefits can be claimed for supplies from Domestic Tariff Area (DTA) units to Special Economic Zone (SEZ) units if payment is received in Indian Rupees (INR) instead of foreign currency. The response clarified that receiving payment in foreign currency is a mandatory statutory requirement for obtaining export benefits and incentives, and it is not merely procedural or condonable.