BoA for SEZs gives conditional approval to BRICS’ Indian regional office at GIFT SEZ

Amiti Sen New Delhi | Updated on August 04, 2021

A file photo of Gujarat International Finance Tec-City (GIFT) at Gandhinagar   -  REUTERS

Exemptions from certain SEZ provisions sought by unit to be provided if Department of Revenue does not highlight concerns by August 9

The Board of Approval for SEZs has given a go-ahead for the setting up of the Indian Regional Office of the New Development Bank — the multilateral development bank set up by the BRICS grouping — at the GIFT IFSC SEZ, Gandhinagar.

However, the exemptions sought by the unit from several compliances, such as net foreign exchange earning, otherwise mandatory under SEZ rules, would be conditional to no objections raised by the Revenue Department to such exemptions within a stipulated period, per officials tracking the matter.

“The Board, after deliberations, decided to approve the proposal with the condition that the Department of Revenue may re-examine their views and highlight their concerns, if any, after due consultation with the Department of Economic Affairs on or before August 9,” according to the minutes of the BoA meeting on July 29.

Also read: Centre plans BRICS Bank’s regional office at GIFT SEZ

The BRICS nations, comprising Brazil, Russia, India, China and South Africa, had endorsed the setting up of an Indian Regional Office of the NDB in a meeting of Foreign Ministers’ in June this year. The NDB, which has its headquarters in Shanghai, was established in 2014, with the goal of meeting the financial constraints faced by emerging markets and developing economies to address infrastructure gaps and sustainable development needs.

BRICS summit next month

The Department of Economic Affairs (DEA), in its submission to the BoA, had backed the setting up of the IRO with certain relaxations and exemptions on the ground that its operationalisation was one of the important agenda items of BRICS, 2021 under India’s chairship. The announcement of operationalisation of IRO is expected to be made in the BRICS Lenders Summit to be held on September 9.

Apart from exemption sought from the mandatory norm of being NFE positive (the foreign exchange earned should be more than foreign exchange spent), it was also proposed that exemptions be given from providing details of bank account, PAN and IEC number, equity including foreign investment, directors and items of manufacture/service activity etc.

The Department of Revenue flagged its reservations on exemptions sought by the unit for several compliances under the SEZ law which are otherwise mandatory for all the units in SEZ. following which the BoA asked it to consult the DEA and submits its concerns by August 9.

“If the Revenue Department does not submit its concerns to the BoA by August 9, the conditional approval to the proposal for grant of exemptions to the IRO would be treated as a regular approval,” the official said.

Published on August 04, 2021

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