Introduction

Special Economic Zones (SEZ) are a specially delineated duty and tax free enclave and shall be deemed to be foreign territory for the purpose of trade operations and duties and traffic. Any person who, intends to set up a Special Economic Zone, may, after identifying the area, make a proposal to the State Government concerned for the purposes of setting up a special economic Zone.

Some of the Special Economic Zones are located at Santa Cruz (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Vishakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida ( Uttar Pradesh) in India.

FEATURES OF SEZ:

  • It includes matter relating to establishment of SEZ and setting up of units therein
  • It provides requirement and obligation for SEZ units
  • Single window clearance system at zone level
  • Establishment of an authority for each SEZ by Central Government for Greater administrative autonomy
  • Designated special court to deal with matter related to SEZ and its speedy trial.

OBJECTIVES OF SEZ:

  • Generation of additional economic activity
  • Promotion of exports of goods and services
  • Promotion of investments from domestic and foreign sources
  • Creation of employment opportunities
  • Development of infrastructure facilities.

Section 15 entitles any person, who intends to set up a Unit for carrying on the Authorised operations in a Special Economic Zones, to submit a proposal to the Development Commissioner concerned. The Development Commissioner in turn place the proposal before the Approval Committee for its approval. Before modification or rejection of a proposal, the Approval Committee should give reasonable opportunity of being heard to the applicant. A person aggrieved by an order of the Approval Committee can make an appeal to the Board of Approval.

WHO CAN SET UP SEZ?

  • Central Government has liberal policy for setting up SEZ
  • Foreign Company
  • Private, joint sector or by Central Government or State Government, jointly or severally

TERMS AND CONDITIONS FOR SETTING SEZ

  • Units approved under SEZ scheme are permitted to be located in SEZ
  • The SEZ units shall abide by local laws, rules, regulations or bye laws in regard to area planning, sewage disposal, pollution control and the like. They shall also comply with industrial and labor laws as may be locally applicable.
  • SEZ shall make security arrangements to fulfil all the requirements of the laws, rules and procedures applicable to such SEZ.
  • The SEZ should have minimum area of 1000 hectares and at least 25% of the area is to be earmarked for developing industrial area for setting up of units
  • Minimum area of 1000 hectares will not be applicable to product specific and port or airport based SEZs.
  • Whenever the SEZs are landlocked, an Inland container Depot (ICD) will be an integral part of SEZs.

 

Sec 7 exempts all goods or service exported out of, of imported into, or procured from the Domestic Traffic Area, by a Unit or Developer in a Special Economic Zone from the payment of taxes, duties or cess under all enactments specified in the First Schedule.

OBLIGATION TO SEZs

  • SEZ units to achieve positive net foreign exchange earnings
  • For this purpose, a legal Undertaking is required to be executed by the unit with the Development Commissioner
  • The units have to provide periodic reports to the Development Commissioner and Zone Customs
  • Any Company set up with FDI has to be incorporated under the Indian Companies Act with the registrar f companies for undertaking Indian operations.

 

 

 

Reference Links:

  1. http://www.legalserviceindia.com/article/l32-Special-Economic-Zone-Myth-and-Reality.html
  2. https://www.indiainfoline.com/article/news-top-story/economics-for-everyone-special-economic-zones-sez-115071300175_1.html
  3. http://www.sezindia.nic.in
  4. http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Special_Economic_Zones.pdf
  5. http://commerce.nic.in/publications/annual-report-pdf-2010-11/CHAPTER_5.pdf
  6. https://www.gtap.agecon.purdue.edu/resources/download/4103.pdf
  7. Image Source: https://cryptovest.com/news/exclusive-manilas-special-economic-zone-crypto-coin-to-go-global/