Procurement from SEZ: A Simplified Guide for Capital Goods Acquisition

In today’s business environment, procuring capital goods is crucial for industries aiming to scale up or enhance their operations. One efficient route for acquiring these goods in India is through Special Economic Zones (SEZs). These zones provide businesses with various benefits, including tax exemptions and streamlined processes for imports and exports. Here, we’ll explore the key steps involved in procuring capital goods from SEZs under the Export Promotion Capital Goods (EPCG) scheme and the issuance of the "Certificate of Supplies from SEZ.”

Step 1: Submitting a Request Along with the Authorisation Application

When a business applies for an EPCG authorisation to procure capital goods from SEZs, it can simultaneously request a “Certificate of Supplies from SEZ.” This certificate acts as a green light for purchasing the specified goods from SEZ units, making the process smoother and more transparent.

Upon receiving the request, the Regional Authority (RA) will issue this certificate after marking the requested import items as “Invalid for direct imports.” The certificate will contain vital details such as:

- Name, Address, and GSTIN of the SEZ unit supplying the goods.

- GSTIN and Address of the EPCG authorisation holder (the company that will install the capital goods).

- Detailed description and quantity of the items being procured, along with their specifications.

- Individual value of the goods to be procured.

This ensures that all parties involved are aware of the transaction specifics and that the procurement is valid and legal.

Step 2: Certificate Distribution

The issued “Certificate of Supplies from SEZ” isn’t just a single copy document. It is marked in quadruplicate to ensure transparency at multiple levels. Each copy is sent to the following entities:

1. The authorisation holder – to confirm their entitlement to procure capital goods.

2. The SEZ supplier unit  – so they are aware of the transaction and can process the order accordingly.

3. The designated SEZ officer – responsible for overseeing the SEZ’s regulatory processes.

4. Relevant port customs authorities – to ensure that the goods pass through customs smoothly and without any issues.

Importantly, this certificate is issued online and becomes part of the authorisation record, streamlining future tracking and usage.

Step 3: Issuing the Certificate Midway

If a company doesn’t request the certificate at the time of the authorisation application, it can do so at a later stage. In such cases, the request must be accompanied by an authorisation utilisation status issued by the relevant customs authorities. This ensures that the actual usage of the authorisation is checked before any new certificate is issued. The certificate will then be issued based on the remaining quantity available for procurement under the authorisation.

Why Opt for Procurement from SEZ?

Procurement from SEZs offers businesses an efficient way to acquire capital goods with various fiscal benefits. The process, while detailed, ensures full transparency and legality at every step, making it a streamlined option for companies looking to scale up their operations.

By understanding these steps and the requirements for procuring goods from SEZs, businesses can make informed decisions, ensuring they meet compliance standards while enjoying the benefits of SEZ procurement.