The Hindu Business Line : SEZ scheme implementation date postponed

THE implementation of the much-touted special economic zones (SEZ) scheme continues to face teething problems, with the Finance Ministry once again postponing the date from which the scheme would come into force.

Official sources said that the revenue department has now held that the customs duty exemptions on imports made by a developer of a SEZ or by units within a SEZ would come into force only from April 1 as against the earlier specified date of March 1 this year.

Further, the excise exemption on goods supplied from the domestic tariff area (DTA) to the units within the SEZ would be available only from April 1.

Although the revenue department had in July 2003 come up with necessary notifications for according duty exemptions on various type of transactions with SEZs, sources pointed out that their implementation date was being postponed from time to time.

"First the notifications were to come into effect on August 15 last year, then the date was shifted to October 15. Then again the revenue department specified December 1 as the date from which they would come into force. These have been again postponed to January 1, 2004, March 1 and now April 1," an industry official said.

It may also be recalled that the Finance Ministry had in early February this year directed its customs field formations to initiate recovery action in cases wherein duty entitlement passbook (DEPB) benefits were extended on supplies made by the DTA units to the SEZs.

The revenue department had then pointed out that the benefit of DEPB scheme does not become legally available in respect of supplies made by DTA units to SEZ units until Chapter XA of the Customs Act is operationalised.

Special provisions relating to SEZs were inserted in the Customs Act through Finance Act, 2002, by creating a new Chapter XA. These provisions were to be brought into operation from a date to be notified. Till now, the said Chapter XA of the Customs Act pertaining to the SEZ scheme has not been brought into operation.