The Hindu Business Line : SEZs: Developers, units making hay while the sun shines

According to Government sources, the board of approval for establishing special economic zones (SEZs) gave formal clearance to 45 of the 169 proposals pending before it this Tuesday. Government sources told Business Line that with 105 SEZs having already been cleared, the total number of approved SEZs is now 150.

Redesignated

However, only 14 SEZs in the list below, which includes redesignated SEEPZ, are already in place.

SEEPZ SEZ, Andheri, Mumbai; Kandla SEZ, Gandhidham, Kachchh; Cochin SEZ; Madras SEZ; Vizag SEZ; Falta SEZ, Kolkata; Noida Export Processing Zone; Surat SEZ (Diamond Park);

Manikanchan, Salt Lake, Kolkata, SEZ; Indore SEZ (Multiproduct); Jaipur SEZ (Gems and jewellery);

Mahindra City SEZ; Chennai (Information technology);

Mahindra City SEZ, Chennai (Apparel and fashion accessories) and Salt Lake Electronic City, Kolkata SEZ (Software).

On Net

Full details of terms, conditions, procedures, and, above all, what makes investments in SEZs so attractive to both SEZ developers and to units set up or proposed to be set up in SEZs are available on a special Web site set up by the Ministry of Commerce and Industry: http://www.sezindia.nic.in/.

This site gives comprehensive information on all aspects of SEZs, including the SEZ Act, income-tax and Customs notifications etc., for both SEZ developers and for units situated in SEZs.

Some of the special attractions are listed below for ready reference.

Special attractions

Developer of an SEZ may import/or procure goods without payment of duty for development, operation and maintenance of the SEZ.

Income-tax exemption for a block of 10 years in 15 years at the option of the developer as per Section 80-IA of the Income-Tax read with Appendix 14-II-N of Handbook of Procedure.

Income-tax exemption to investor's in SEZs under section 10(23)G of Income-Tax Act.

Exemption from Service Tax.

Investment made by individuals etc. in SEZ developing companies eligible for exemption under Section 88 of the Income-Tax.

At least 25 per cent area of the SEZ shall be used for developing industrial area for setting up of units.

The predominant objective of development of a SEZ would be to create infrastructure, which would facilitate setting up of units.

Applications will be entertained by a committee headed by the Chief Commissioner of the Central Excise for exemption of taxable services provided by a service provider to SEZ developer or to a unit located in an SEZ for the development, operation and maintenance or setting up of SEZ units.

SEZs shall be duty-free enclaves and will be treated as foreign territory for trade operations and duties and tariffs.

No licence required for import.

Exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc.

Exemption from Central Excise duty on procurement of capital goods, raw materials, consumable spares etc. from the domestic market.

Supplies from domestic trade areas (DTA) to SEZ units to be treated as deemed exports under 80HHC of the Income-Tax Act.

Reimbursement of Central State Tax paid on domestic purchases.

100 per cent income-tax exemption for SEZ units for five years, 50 per cent tax exemption for two years and up to 50 per cent of the profits ploughed back for the next three years under Section 10 A of the Income-Tax Act.

Carry forward of losses.

100 per cent income-tax exemption for 3 years and 50 per cent for 2years under Section 80-LA of the Income-Tax Act for off-shore banking units.

Reimbursement of the duty paid on furnace oil procured from domestic companies, as per the rate of drawback notified by the DGFT.

SEZ units to be positive net foreign exchange earners within three years. However, there is no minimum limit on the foreign exchange required to be earned by them.

All the import/export operations of the SEZ units will be on self-certification basis.

No routine examination by Customs of export and import cargo. No separate documentation required for customs and Exim policy.

Exemption from industrial licensing requirement for items reserved for SSI sector.

Full duty shall be levied on domestic sales subject to import policy in force.

No fixed wastage norms.