SEZ
(Amendment) Rules, 2013 notified to give effect to the reform announcements made
in the Foreign Trade Policy
To
implement the reform announcements made in the Annual Supplement (2013-14) to
the Foreign Trade Policy 2009-14 earlier this year, the Ministry of Commerce notified the Special Economic Zone (Amendment) Rules, 2006
on August 12, 2013. The amendments are summarized
below.
1.
Relaxation
of area requirements
·
The most
significant change is the doing away with the present requirement of 10 hectares
of minimum land area for IT / ITeS SEZs and replacing it with a minimum built up
area criteria depending on the location of the SEZ, as summarized
below.
|
Location
of SEZ
|
Earlier
minimum area requirement
|
Minimum
area requirement after amendment
|
|
Category
A
cities
(Major
cities namely Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and
Kolkata)
|
10
hectares of
land area and
100,000 square meters of built up area |
100,000
square meters with
no requirement of minimum land area
|
|
Category
B cities
(Ahmedabad,
Bhubneshwar, Chandigarh, Coimbatore, Indore, Jaipur, Kochi, Lucknow, Madurai,
Mangalore, Nagpur, Thiruvananthapuram, Tiruchirappali, Vadodara and
Visakhapatnam)
|
50,000
square meters with
no requirement of minimum land area
| |
|
Category
C cities
(All
other cities)
|
25,000
square meters with
no requirement of minimum land
area
|
The
above relaxation is however not applicable to the wider sector SEZs for
Electronics hardware and Software (including ITeS).
·
The
minimum land area requirement for multi-product SEZs has been halved from 1000
hectares to 500 hectares, and similarly for sector-specific SEZs from 100
hectares to 50 hectares (and from 200 hectares to 100 hectares for select
states[1]).
·
A graded
scaling provision has been introduced by virtue of which developers can create
additional sector/s for a land tract of 50 acres or more in existing SEZs and
for incremental contiguous land tracts of 50 hectares where land additions are
proposed to the SEZ.
2.
Sectoral
broad banding
·
Sectoral
broad-banding to encompass compatible sectors under the same sector category has
been enabled by amending the definition of “Sector” in the amended SEZ Rules.
·
In this
regard, the Rules, inter alia,
provide that, all ancillary services and
research and development services of a particular sector and additional
combination of products and services of a similar or compatible nature shall
constitute a single sector.
3.
Duty
benefits on pre-existing structures on vacant land forming part of the SEZ
·
Land
with structures on which no economic activity is being carried on can now be
added to an existing SEZ. Further, any developments or up-gradation to the
pre-existing structures which has been subsequently added / included in the SEZ
would be eligible for duty benefits similar to any other activity in the SEZ.
·
Further,
the authorized operations carried on in such added / included infrastructure
will also be eligible for duty benefits similar to any other
activity.
4.
Exit
policy for units
·
A SEZ
Unit is now allowed to opt out of a SEZ by transferring its assets and
liabilities to another person by way of transfer of ownership, including sale of
such units, along with the duty obligations, subject to certain conditions.
·
The
conditions inter alia, stipulate that the Unit should be operational for a
minimum period of two years. However, the provisions do not cover situations
wherein the units which have not been able to commence operation wish to opt out
of a SEZ.
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