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A new policy has been introduced in the Exim Policy effective from 1.4.2000 for
setting up of Special Economic Zones in the country with a view to provide an
internationally competitive and hassle free environment for exports. Units may
be set up in SEZ for manufacture, re-conditioning, and repair or for service
activity. All the import/export operations of the SEZ units will be on
self-certification basis. The units in the Zone have to be a net foreign
exchange earner but they shall not be subjected to any pre-determined value
addition or minimum export performance requirements. Sales in the Domestic
Tariff Area by SEZ units shall be subject to positive foreign exchange earning
and on payment of full Custom Duty and import policy in force.
The policy provides for setting up of SEZ’s in the public, private, joint sector
or by State Governments. It was also envisaged that some of the existing Export
Processing Zones would be converted into Special Economic Zones. Accordingly,
the Government has issued notifications on 1.11.2000 for conversion of the
existing Export Processing zones at Kandla and Surat (Gujarat), Santa Cruz
(Maharashtra) and Cochin (Kerela) into Special Economic Zones.
Salient feature of the scheme are as under :
Eligibility :
(a) Special Economic Zone (SEZ) is a specifically delineated duty free enclave
and shall be deemed to be foreign territory for the purposes of trade operations
and duties and tariffs.
(b) Goods going into the SEZ area from DTA shall be treated as deemed exports
and goods coming from the SEZ area into DTA shall be treated as if the goods are
being imported.
(c) SEZ units may be set up for manufacture of goods and rendering of services,
production, processing, assembling, trading, repair, remaking, reconditioning,
re-engineering including making of gold/ silver/ platinum jewellery and articles
thereof or in connection therewith. Units for generation/distribution of power
may also be setup in SEZs.
Export and Import of Goods :
1. SEZ units may export goods and services including agro-products, partly
processed jewellery, sub-assemblies and component. It may also export
by-products, rejects, waste scrap arising out of the production process.
2. SEZ units, other than trading/service unit, may also export to Russian
Federation in Indian Rupees against repayment of State Credit/Escrow Rupee
Account of the buyer, subject to RBI clearance, if any.
3. SEZ unit may import without payment of duty all types of goods, including
capital goods, as defined in the Policy, whether new or second hand, required by
it for its activities or in connection therewith, provided they are not
prohibited items of imports in the ITC(HS). Goods shall include raw material for
making capital goods for use within the unit. The units shall also be permitted
to import goods required for the approved activity, including capital goods,
free of cost or on loan from clients.
4. SEZ units may procure goods required by it without payment of duty, from
bonded warehouses in the DTA set up under the Policy and from International
Exhibitions held in India.
5. SEZ may import, without payment of duty, all types of goods for creating a
central facility for use by software development units in SEZ. The Central
facility for software development can also be accessed by units in the DTA for
export of software.
6. Gem & Jewellery and Jewellery units may also source gold/ silver/ platinum
through the nominated agencies.
7. SEZ units may also import/procure goods from DTA without payment of duty for
setting up of units in the Zone.
Leasing Of Capital Goods
Leasing Of Capital Goods :
SEZ unit may, on the basis of a firm contract between the parties, source the
capital goods from a domestic/foreign leasing company. In such a case the SEZ
unit and the domestic/ foreign leasing company shall jointly file the documents
to enable import/procurement of the capital goods without payment of duty.
Net Foreign exchange Earning (NFE)
:
SEZ unit shall be a positive net foreign exchange earner. Net Foreign exchange
Earning (NFE) shall be calculated cumulatively for a period of five years from
the commencement of commercial production according to the formula given in
Paragraph 7.4 of the Handbook (Vol-I).
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