[BREAKING] Supply of Goods in SEZ Warehouses or FTWZs before Export Clearance or DTA deemed exempt from GST: Budget 2025
A new Entry (aa) has been added to Paragraph 8 of Schedule III, stating that goods stored in SEZ or FTWZ warehouses and supplied before export clearance or movement to the DTA will neither be considered as supply of goods nor as supply of services
![[BREAKING] Supply of Goods in SEZ Warehouses or FTWZs before Export Clearance or DTA deemed exempt from GST: Budget 2025](https://www.taxscan.in/wp-content/uploads/2025/02/SEZ-Goods-supply-in-SEZ-Warehouses-GST-Exemption-for-FTWZ-Supplies-taxscan.jpg "[BREAKING] Supply of Goods in SEZ Warehouses or FTWZs before Export Clearance or DTA deemed exempt from GST: Budget 2025")
The Union Finance Minister Nirmala Sitharama presented her record eighth Union Budget 2025-26 in Parliament today ,February 1. Delivering the first full budget of Third Narendra Modi-government, Nirmala Sitharaman has become the only finance minister to present the Union Budget for eight consecutive times. The amendment to Schedule III of the CGST Act, 2017, now exempts the...
The Union Finance Minister Nirmala Sitharama presented her record eighth Union Budget 2025-26 in Parliament today ,February 1. Delivering the first full budget of Third Narendra Modi-government, Nirmala Sitharaman has become the only finance minister to present the Union Budget for eight consecutive times.
The amendment to Schedule III of the CGST Act, 2017, now exempts the supply of goods warehoused in Special Economic Zones ( SEZs ) and Free Trade Warehousing Zones ( FTWZs ) before export clearance or movement to the Domestic Tariff Area ( DTA ) from GST liability. This change is retrospective, effective from July 1, 2017, though taxes already paid will not be refunded.
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A new Entry (aa) has been added to Paragraph 8 of Schedule III, stating that goods stored in SEZ or FTWZ warehouses and supplied before export clearance or movement to the DTA will neither be considered as supply of goods nor as supply of services. Explanation 2 has been revised to apply this exemption to transactions under clause (a), while Explanation 3 has been added to define Special Economic Zone, Free Trade Warehousing Zone, and Domestic Tariff Area in alignment with the Special Economic Zones Act, 2005.
This amendment provides clarity to businesses operating in SEZs and FTWZs, ensuring that intra-zone transactions before export or domestic clearance do not attract GST. The reduction in compliance requirements is expected to improve business efficiency and simplify warehousing operations. By encouraging the use of FTWZs for storage and redistribution, the logistics sector is set to benefit from improved trade processes and cost efficiency.
The retrospective application of this amendment aims to bring consistency in GST treatment for businesses dealing with warehoused goods. However, refunds will not be available for taxes already paid on past transactions falling under this exemption.
By aligning GST regulations with the SEZ policy framework, the government aims to boost trade and warehousing operations, making India a more attractive destination for global logistics and commerce.
To Read the full text of the Order CLICK HERE
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