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 Special Economic Zones (SEZ)
The Foreign Trade Policy of Government of India provides for
setting up of Special Economic Zones (SEZ) in the country with a
view to provide an internationally competitive hassle free
environment for exports. Units may be set up in SEZ for
manufacture of goods and rendering of services. The units in
SEZs have to be a net foreign exchange earner but they are not
subjected to any pre-determined value addition or minimum export
performance requirements. Sales in the domestic tariff area by
SEZ units shall be subject to payment of full custom duty and
import policy inflows.
SEZs could be set up in public, private, joint sector or by
State governments. 100% FDI is allowed in setting up of SEZs.
The government of India has also converted existing Export
Processing Zones into SEZs.
The minimum size of the SEZs shall be 1000 hectares except in
product specific and port/airport based SEZs. Approval for
setting up of new SEZs is given by Department of Commerce,
Government of India.
For setting up units in SEZs, all approvals are given by a
Committee headed by Development Commissioner of the concerned
SEZ. For setting up a unit in SEZ, application in prescribed
format should be submitted to the development Commissioner.
A large number of new SEZs have come up in private sector in
India including SEZs set up by foreign companies. A number of
new SEZs have been set up by State governments. List of SEZs
Facilities to SEZ Units
Detailed policy applicable to SEZ units is given in Appendix
14-II of Handbook of Procedures Vol-I of Director General of
Foreign Trade (DGFT).
• SEZ units may import or procure from the domestic sources,
duty free, all their requirements of capital goods, raw
materials, consumables, office equipment etc., for setting up of
units or further operations without any license or specific
approval
• Goods imported/procured locally duty free could be utilized
over the approval period of five years
• 100% income tax exemption (Section 10 A) for first five years
and 50% for two years thereafter
• 100% FDI is allowed in manufacturing sector in SEZ units under
automatic route except sectors requiring industrial license.
100% FDI allowed in items reserved for small scale units
• Setting up of offshore banking units allowed in SEZs. They
would be entitled for 100% income tax exemption for three years
and 50% for next two years
• More flexible exchange control regulations for units in SEZs
and for external commercial borrowing upto $ 500 million in a
year
• Exemption from service tax to SEZ units
For more details, please go to the website of SEZs maintained by
Department of Commerce, Government of India at
www.sezindia.nic.in
Contact details of SEZS http://www.sezindia.nic.in/HTMLS/contact_details.htm
Set up SEZ Enterprise
http://www.sezindia.nic.in/HTMLS/Form_A_and_checklist.pdf
SEZ Act 2005
http://www.sezindia.nic.in/HTMLS/SEZ%20Act,%202005.pdf
SEZ Act 2006 http://www.sezindia.nic.in/HTMLS/SEZ-RULES2006.PDF
FAQs http://www.sezindia.nic.in/HTMLS/faq.htm |
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