APPENDIX-14-II-O
(GUIDELINES FOR SEZ DEVELOPERS)
(TO BE
PUBLISHED IN PART II SECTION 3(ii) OF THE GAZETTE OF INDIA EXTRAORDINARY )
Ministry of Commerce &
industry
Department of Commerce
EPZ section
* * *
S.O
No. In excise of the power
conferred under Section 80 IA of the Income Tax Act, 1961, read with sub rule
(2) of rule 18 C of the Income Tax Rules, 1962, the Central Government hereby
makes the following scheme to develop, operate and maintain Special Economic
Zones for the period beginning on the 1st day of April, 2001 for the
Zones developed on or before 31.3.2006.
(a) The scheme shall aim at development
of integrated world class infrastructure for exports including carrying out
manufacture of goods, rendering of services or in connection therewith and
would include industrial, commercial and social infrastructure. Components of a Special Economic Zone shall
include roads, airports, ports, transport system, generation and distribution
of power, telecom, hospitals, hotels, educational institutions, leisure and
entertainment units, residential/industrial/commercial complexes, water supply
sanitation and sewerage system and any other facility required for development
of the Zone.
(b)
Special Economic Zones may be developed and managed in the private sector or
jointly by State Government and a private agency or exclusively by the State
Government or their agencies. In the
case of privately developed zones, the investors could be either Indian
individuals, NRIs, Indian or foreign companies.
(c)
New infrastructural development works such as construction of Standard Design
Factory Building etc. and operation and mainteance of infrastructure in the
Zones may also be undertaken through private/joint/State sector in the Export
Processing Zones converted into Special Economic Zones.
2. Criteria
for approval:
Proposals for setting up SEZ in the
public/private/joint/State sector are required to meet the following
conditions:
(i)
Minimum size of the SEZ shall not be less than 1000
hectares. This would however, not apply
to existing EPZs converting into SEZs as such or for notifying additional area
as a part of such SEZ or to product specific SEZs.
(ii)
The SEZ and units therein shall abide by local laws, rules,
regulations or bye-laws in regard to area planning, sewerage disposal,
pollution control and the like. They
shall also comply with industrial and labour laws and such other laws/rules and
regulations as may be locally applicable.
(iii)
Such SEZ shall make adequate arrangements to fulfill all
the requirements of the laws, rules and procedures applicable to such SEZ.
(iv)
Only units approved under the SEZ Scheme would be permitted
to be located in these SEZ. At least 25
% area of the SEZ shall be used for developing industrial area for setting up
of such units.
(v)
The predominant objective of development of a SEZ would be
to create infrastructure, which would facilitate setting up of industrial area
for units therein as indicated in the para (iv) above.
3. Procedure for Approval:
3.1 Applications (10 copies) indicating
the name and address of the applicant, status of the promoter (whether
individual/private company/State Government/NRIs etc.) along with a project
report covering the following particulars shall be submitted to the Chief
Secretary of the State:
(i)
Location of the proposed zone with details of existing
and proposed infrastructure,
(ii)
Area of the proposed SEZ and its aerial distance from the
nearest Sea Port/Airport/Rail/Road head etc.
(iii)
Financial details including investment proposed, mode of
financing the project and viability of the project.
(iv)
Details of foreign equity and repatriation of dividends
etc., if any.
(v)
Whether the zone will allow only certain specific
industries or will be a multi-product zone.
3.2 The State Government shall, forward it along with their
commitment to the following, to the Department of Commerce, Government of
India:
(i)
The
area incorporated in the proposed Special Economic Zone is free from
environmental prohibition ;
(ii)
Water, Electricity and other services
would be provided as required;
(iii)
Full
exemption in electricity duty and tax on sale of electricity for self generated
and purchased power;
(iv)
To
allow generation, transmission and distribution of power within SEZ;
(vi)
Exemption
from State Sales Tax, octroi, mandi tax, turnover tax and taxes, duty, Cess, levies on supply of goods from Domestic
Tariff Area to SEZ units;
(vii)
For
units inside the Zone, the powers under the Industrial Disputes Act and other
related Acts would be delegated to the Development Commissioner.
(viii)
The
Zone will be declared as a Public Utility Service under Industrial Disputes
Act.
(ix)
Single
point clearances system would be provided to the units in the Zone under State
Laws/Rules.
3.3 The
proposal incorporating the commitments of the State Government shall be
considered by the Board of Approval (BOA) as notified vide notification No
14/1/2001-EPZ dated 7.8.2001.
3.4 On acceptance of the proposal by the
BOA, the Department of Commerce will issue a Letter of Permission to the
applicant ; hereafter referred to as “developer”.
3.5
After approval, the developer shall come to the
Board of Approval indicating specific activity proposed to be undertaken for
development, operation and maintenance of SEZ.
The Board of Approval may give general guidelines regarding the
activities to be undertaken in SEZs. Other entities, as approved by the Board
of Approval, may also undertake approved development activities of the SEZ
provided that commercial, residential and recreational facilities shall be
approved only if the applicant has at least 26% equity in such entities. Based on the activities approved for the
SEZs by the Board of Approval, the Unit Approval Committee shall approve the
list of machinery, and the construction materials required for development
operation and maintenance of the zone.
3.6
In
case of converted EPZ into SEZ approval for development, operation and
maintenance of requirements in infrastructure will have to be obtained from BOA
on case to case basis. Para 3.5 shall
mutates mutandis apply to creation of new infrastructure in the converted SEZs.
4. General Conditions:
(1) The undertaking
applying for approval shall undertake to continue to operate under the SEZ
scheme during the period in which benefits under Section 80 IA of the Income
Tax Act are to be availed.
(2)
The
Central Government may withdraw the approval given to an undertaking for
setting up of SEZ if the undertaking fails to comply with any of the conditions
of approval.
5. Agreement
with Central Government
The
Letter of Permission issued by the Government of India (Department of Commerce)
to the developer for setting up of Special Economic Zone shall be treated
as ‘Agreement’ for availing exemption
under the Section 80-IA of the Income Tax Act.
New Delhi
Dated : 24.1.2002 (D.K.Mittal)
Joint Secretary
No F.2(1)/3/2001-EPZ