The Hindu Business Line : Notification on changes to SEZ rules `in 10 days'

New Delhi April 23 The Government plans to amend its special economic zones rules within the next 10 days to specify a minimum processing area of 50 per cent for all SEZs and also to limit the size of multi-product SEZs to 5,000 hectares.

"We will notify the amendments in 10 days," the Commerce Secretary, Mr G.K. Pillai, told presspersons here. These changes would have a retrospective effect.

The decisions to limit the size of multi-product SEZs and also to stipulate the minimum processing area of 50 per cent were taken at the recent meeting of the Group of Ministers on SEZs.

Mr Pillai also said that talks are on between the Commerce, Power and Finance Ministries over the issue of taxation of sale of power within and outside the SEZs.

While the Commerce Ministry is keen that there should be no taxation on sale of power within the zone, the Finance Ministry is understood to have made a case for taxing the income on power sold in the non-processing area of the SEZs.

Meanwhile, the Government's decision to limit the size of multi-product SEZs to 5,000 hectares has "shocked" certain developers.

"It has come as a shock for us," Mr Bhavin Shah, Vice-President-SEZ of Mundra Port and Special Economic Zone Ltd (MPSEZ), said at a press conference organised by Export Promotion Council for EOUs and SEZ units.

He, however, added that the company was awaiting the notification to go through the fine print and then only inferences could be drawn on the impact of the Government's decision. Mr Shah said that MPSEZ, which has been promoted by the Adani Group, has already acquired 15,665 acres, of which 5,947 acres have been notified. MPSEZ is also looking to come up with an initial public offering (IPO).

Mr Shah said that the move to increase the processing area would compel the company to go back to the drawing board. "We may have to cut down on the open space as the number of units will have to be increased. Then there are issues on utilities... ," he said.

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