GST Impact on FTWZ Transactions: Latest Insights 2025

India’s Free Trade Warehousing Zones (FTWZ) continue to play a crucial role in enabling global trade, seamless distribution, and cost-efficient supply chain management. With the evolving tax framework, the Goods and Services Tax (GST) has brought significant changes to FTWZ transactions in India, shaping the way businesses handle imports, exports, warehousing, and duty-free operations. In 2025, the GST impact on FTWZ in India has become even more relevant for industries dealing with third country export, custom bonded warehousing, duty-free shops, liquor warehouses, and logistics and freight forwarding services.

This article explores the latest insights on GST implications for FTWZ transactions and why companies are increasingly relying on trusted partners like Awat Logistics for FTWZ solutions in Chennai, Mumbai, and across India.

Understanding FTWZ and GST Connection

A Free Trade Warehousing Zone (FTWZ) is a special category of Special Economic Zone (SEZ) designed to facilitate international trade. It allows businesses to import, store, repackage, and re-export goods without immediate customs duties or taxes.

However, under the GST regime, specific provisions apply to FTWZ transactions:

• Imports into FTWZ warehouses are treated as being outside the customs territory of India, making them exempt from IGST at the time of import.
  
  

• Domestic clearance from FTWZ into the Indian market is treated as an import, attracting applicable custom duties and GST.
  
  

• Third country export transactions (importing into FTWZ and re-exporting without entering India) remain duty-free and tax-neutral.
  
  

Thus, FTWZ operators, exporters, importers, and logistics and freight forwarding service providers must carefully manage compliance, documentation, and taxation under GST to ensure efficiency.

GST Impact on Key FTWZ Activities

1. Custom Bonded Warehousing & FTWZ Transactions

Under GST, custom bonded warehousing within FTWZ offers companies the advantage of storing goods without immediate tax liability. Businesses importing machinery, electronics, and bulk raw materials can defer GST until goods are cleared for home consumption.

• For exporters, this means cash flow benefits and reduced working capital blockage.
  
  

• For importers serving the domestic market, GST becomes payable only when goods are sold in India.

2. Third Country Export

One of the biggest advantages of FTWZ under GST is the third country export model. Goods can be imported, stored in an FTWZ warehouse, and re-exported to another country without ever entering the domestic market.

• GST is not applicable on such transactions.
  
  

• This helps international traders, especially in pharma, textiles, electronics, and chemicals, to manage global distribution efficiently from FTWZ India hubs.

3. Duty-Free Shops & Liquor Warehousing

With GST streamlining tax processes, duty-free shops and liquor warehouses connected with FTWZs benefit from transparent compliance and smooth supply chain movement.

• Alcohol and spirits imported into FTWZ warehouses in Chennai or Mumbai can be stored under alcohol warehousing schemes until dispatched to duty-free shops or export destinations.
  
  

• GST exemption during storage ensures cost competitiveness for global liquor brands.

4. Custom Clearance & Logistics Services

Under GST, custom clearance procedures in FTWZ are faster due to electronic documentation and reduced paperwork. Companies searching for a logistic service near me now prefer FTWZ-enabled providers like Awat Logistics, who manage custom clearance, freight forwarding, and warehousing under a single-window solution.

5. Supply Chain Management & Freight Forwarding

FTWZs have become critical for businesses optimizing supply chain management under GST. Consolidation, labeling, and repackaging activities can be carried out within FTWZ warehouses without triggering GST until final domestic sale.

• For exporters, this provides value-added services like kitting, palletization, and quality inspection.
  
  

• For importers, freight forwarding through FTWZ Mumbai and FTWZ Chennai ensures reduced costs and compliance benefits.

FTWZ Solutions & the Moowr Scheme

The Moowr (Manufacture and Other Operations in Warehouse Regulations) Scheme is an important GST-aligned initiative that complements FTWZ operations.

• It allows businesses to import goods without duty payment and use them for manufacturing or other operations inside a bonded warehouse.
  
  

• GST is deferred until goods are cleared for home consumption.
  
  

• This is particularly beneficial for sectors like electronics, automotive, chemicals, and alcohol warehousing.
  
  

Awat Logistics integrates Moowr scheme solutions with FTWZ warehousing services, enabling businesses to leverage both benefits for maximum cost efficiency.

City-Wise FTWZ Insights: Chennai & Mumbai

FTWZ Chennai

Chennai has emerged as a strong FTWZ hub due to its port connectivity, automotive clusters, and electronics industries. Businesses use FTWZ Chennai warehouses for import consolidation, third country export, and alcohol warehousing. GST impact here has made custom clearance and bonded warehousing more transparent and beneficial for global traders.

FTWZ Mumbai

Being India’s financial capital and trade hub, FTWZ Mumbai caters to multiple industries including liquor, pharmaceuticals, and textiles. With proximity to JNPT Port, GST-aligned FTWZ solutions in Mumbai are ideal for freight forwarding and supply chain management.

Why Choose Awat Logistics for FTWZ Services in India?

Awat Logistics stands as a trusted partner offering end-to-end FTWZ solutions in India, ensuring compliance with GST, customs, and international trade policies.

Key advantages:

• Expertise in custom bonded warehousing and GST compliance.
  
  

• Seamless custom clearance and freight forwarding services.
  
  

• Specialized handling of alcohol warehousing, duty-free shop supplies, and third country exports.
  
  

• Strong FTWZ presence in Mumbai, Chennai, and other key hubs.
  
  

• Integrated supply chain management and Moowr scheme support.
  
  

For businesses searching for FTWZ services in India or a logistic service near me, Awat Logistics provides tailor-made solutions that reduce cost, improve compliance, and enhance global trade efficiency.

Conclusion

In 2025, the GST impact on FTWZ transactions has reshaped how businesses handle imports, exports, and warehousing in India. With benefits like deferred tax, simplified compliance, and global trade facilitation, FTWZ in India continues to be a game-changer for companies across industries.

Whether it’s third country export, duty-free shops, the liquor warehouse, alcohol warehousing, or logistics and freight forwarding, FTWZ solutions aligned with GST offer unmatched efficiency. Companies partnering with Awat Logistics can leverage FTWZ advantages under GST and schemes like Moowr, ensuring smooth, compliant, and profitable global trade operations.