The Government has given its approval to Reliance Industries’ plans of de-notifying more than 40 per cent of its multi-product Special Economic Zone in Jamnagar subject to refund of all tax benefits it received for developing the area.

The company has also been asked to obtain a no-objection-certificate from the State Government of Gujarat.

Refund of benefits

“The Board of Approval has approved RIL’s proposal to denotify 728.43 hectares, reducing the total area of its Jamnagar SEZ to 1035.72 hectares. The clearance is subject to the company getting an NOC from the State Government and refunding all tax benefits it received for developing the de-notified area,” a Government official told Business Line.

RIL had applied for de-notifying about 40 per cent of its SEZ spread over 1764.14 hectares as it wants to implement new projects in the area with investments up to Rs 42,000 crore.

The BoA, which takes most decisions related to the setting up and operation of SEZs, met on Friday.

“The developer has applied for partial de-notification so as to implement a number of new projects in the domestic tariff area in Jamnagar near the SEZ. The proposed projects will mainly cater to the significant existing domestic demand,” the Development Commissioner said in a note submitted to the BoA.

Multi-product status

The SEZ will retain its multi-product status as the total area would remain higher than the minimum required area of 1,000 hectares.

“Although the SEZ mainly comprises refineries, retaining the multi-product status will allow the company to invest in value-added products later, if it wants to,” the official said.

A number of SEZs have sought de-notification and cancellation of approval following the Government’s decision to impose the minimum alternate tax and dividend distribution tax on SEZ investors.

(This article was published on January 18, 2013)
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