How the DoC's Resolution of 11 SEZ EoDB Issues Could Impact GIFT City Businesses

A landmark April 2026 meeting chaired by the Additional Secretary, Department of Commerce, produced concrete action points on eleven long-standing compliance and regulatory issues facing India's Special Economic Zones and Export Oriented Units, with direct implications for business at GIFT City.

Setting the Stage: Why India's SEZ Ecosystem Needed This Meeting

India's Special Economic Zones (SEZs) and Export Oriented Units (EoUs) collectively represent one of the country's most strategically important export infrastructure networks. Yet for years, operators within these zones have faced a tangle of legacy compliance requirements, regulatory inconsistencies, and policy gaps that were originally designed for a pre-GST, paper-heavy era of trade administration. On April 7, 2026, the Department of Commerce convened a high-level meeting under Additional Secretary Shri Ajay Bhadoo at Vanijya Bhawan, New Delhi, to directly address eleven of these pressing Ease of Doing Business (EoDB) challenges, with the Export Promotion Council for EOUs and SEZs (EPCES) presenting the consolidated industry view.

The meeting attended by senior DoC officials, DGFT, NSDL, Development Commissioners from MEPZ, CSEZ, SEEPZ, KASEZ, NSEZ, and VSEZ, and industry representatives produced a set of specific action points that, taken together, represent a significant step toward modernising India's SEZ regulatory architecture.

Issue 1: Fixing the GST Invoice Endorsement Bottleneck

Perhaps the most immediately impactful resolution concerns the GST invoice endorsement process under SEZ Rule 30(4) and CGST Rule 89(1)(a) and (b). Currently, every invoice for DTA-to-SEZ supplies requires physical endorsement by an SEZ Superintendent/Authorised Officer to enable GST refund claims  a requirement that did not exist in the pre-GST service tax regime and which has created massive pendency and manual compliance friction across India's SEZ ecosystem.

NSDL informed the meeting that a Standard Operating Procedure (SOP) has been developed and API-based digital integration is at an advanced stage, expected to go live by mid-June 2026. After that, physical endorsement will be eliminated. The Chair additionally directed amendments to SEZ Rules in consultation with the Department of Revenue to restrict endorsement requirements only to cases where a refund is actually due to the DTA supplier. This reform, once implemented, could dramatically reduce compliance burden for the thousands of companies operating across India's 200+ SEZs.

Issue 2: Rationalising Service Export Reporting

DG, EPCES highlighted that SEZ service units face duplicative, overly complex monthly reporting obligations, submitting the same export and import data across multiple formats (Softex, DSPF, MPR, QPR, SERF, APR) to different authorities, including SEZ offices, GST authorities, and banking channels. Companies managing large SEZ footprints like TCS, which operates 62 SEZ units across India, bear disproportionate administrative loads. The Chair directed NSDL to integrate all data sets into a unified module for streamlined report generation, with completion targeted by October 2026.

The current reporting framework requires the same export data to be submitted separately to SEZ authorities, GST authorities, and banking channels. Rationalization into a single consolidated submission is long overdue.

Issue 3: Export Duty on DTA-to-SEZ Supplies

EPCES raised a fundamental policy concern: the levy of export duty on supplies from the Domestic Tariff Area (DTA) to SEZ units. The industry body argued this was never envisaged under the SEZ Act, 2005, and was imposed through Rules creating a structural disadvantage for SEZ units relative to DTA units in procuring inputs for export production. High export duty on steel and a 30% duty on chrome ore/concentrate were cited as examples adversely impacting competitiveness, in some cases threatening the viability of operations entirely. The Chair acknowledged the concern and confirmed DoC is actively pursuing the issue with the Department of Revenue, though the final decision rests with DoR, given the revenue implications.

Issue 4: RoDTEP for FTWZs & the Competitive Imbalance

A significant policy inequity was brought to the meeting's attention: the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme benefits exports routed through overseas free zones (such as warehouses in Dubai or Singapore) but not those routed through India's own Free Trade and Warehousing Zones (FTWZs), even though FTWZs are themselves designated SEZs under Indian law.

This creates a perverse incentive that discourages use of Indian FTWZs and undermines the government's goal of developing India's own warehousing and logistics infrastructure. The Chair directed DoC to take the matter up with DGFT for the amendment of FTP para 4.55(ix).

GIFT City: The SEZ Reform Multiplier

GIFT City India's International Financial Services Centre (IFSC) and the country's most advanced greenfield smart city operate as a Special Economic Zone and therefore directly benefit from every reform to India's broader SEZ ecosystem. For businesses setting up in GIFT City, whether global banks, insurance firms, alternative investment fund managers, fintech companies, or family offices, the ease of operating within the SEZ framework is a critical decision factor.

Reforms that automate GST endorsement, rationalise reporting, resolve TDS anomalies (SEZ authorities not obtaining Section 10(46)/46A exemptions, leading to unnecessary TDS demands on rental payments), and clarify duty exemptions all contribute to making GIFT City and India's SEZ network as a whole a genuinely competitive business destination. The April 2026 meeting's outcomes, combined with broader SEZ reforms underway, reinforce India's commitment to world-class ease of doing business standards at its premier international financial hub.

The 11-Point Reform Summary

Sr.	EoDB Issue	Status / Action Point
1	SEZ-to-DTA Concessional Duty & Drawback	DoC to consult CBIC; clarification sessions via Development Commissioners
2	GST Invoice Endorsement Streamlining	SOP developed; API integration live mid-June 2026; SEZ Rules amendment planned
3	Compliance Reporting Simplification (Services)	NSDL data integration by Oct 2026; unified reporting module in progress
4	TDS Notices on SEZ Rental Payments	DCs directed to obtain Section 10(46)/46A exemption on priority
5	Export Duty on DTA-to-SEZ Supplies	DoC pursuing with the Department of Revenue (DoR)
6	AMRL SEZ, Nanguneri (NCLT Proceedings)	DC MEPZ is directed to expedite regular meetings with affected units
7	SEZ Jobwork for DTA Units (No Export Linkage)	SEZ Division to consult CBIC; Rule 43 amendment under consideration
8	RoDTEP for Exports through FTWZs	DoC to pursue with DGFT for FTP para 4.55(ix) amendment
9	Vacant NPA De-Notification in IT/ITES SEZs	EPCES to submit a detailed representation for examination
10	Rooftop Solar in SEZ Common Areas	Under consideration with DGEP
11	MOOWR Units in SEZ NFE+ Calculation	To be addressed as part of broader SEZ reforms

Conclusion: Momentum Towards a Modern SEZ Framework

The April 7, 2026 meeting represents more than a list of pending issues  it is a public commitment by India's commerce ministry to systematically dismantle the regulatory friction that has historically made SEZ operations more cumbersome than they need to be. With digital integration timelines set (mid-June 2026 for GST automation, October 2026 for unified reporting), SEZ Rule amendments in the pipeline, and inter-ministerial coordination with CBIC, DoR, and DGFT actively underway, India's SEZ ecosystem is on the cusp of a meaningful modernisation.

For domestic and global businesses considering India as an export and investment base  including through the GIFT City gateway these reforms are a strong signal that the regulatory environment is moving in the right direction.

DISCLAIMER This article is published for informational, educational, and analytical purposes only. It does not constitute legal advice, tax advice, regulatory guidance, or investment advice. All information in this article is based on the officially circulated Minutes of the Meeting held on April 7, 2026 under the Chairmanship of Shri Ajay Bhadoo, Additional Secretary, Department of Commerce, Government of India, forwarded vide Office Memorandum No. K-43022/213/2025-SEZ dated April 26, 2026. Action points and reform proposals described herein are directions and recommendations emerging from the meeting. They are not yet enacted regulations, notifications, or circulars. All reforms are subject to further inter-ministerial consultation, rule-making, legislative process, and gazette notification before coming into legal effect. References to GIFT City relate to its status as a Special Economic Zone under the SEZ Act, 2005, regulated by IFSCA under the International Financial Services Centres Authority Act, 2019. GIFT City-specific regulations are governed separately by IFSCA and may differ from general SEZ provisions. SEZ and EoU regulations are complex, jurisdiction-specific, and subject to frequent change. All businesses operating in or considering setting up in SEZs, EoUs, or GIFT City are strongly advised to obtain qualified legal, tax, and regulatory advice before making any business or compliance decisions. The publisher is not a law firm, regulatory body, or government authority. Nothing in this article should be construed as official regulatory guidance.