special economic zones (sezs) act 2005

SPECIAL ECONOMIC ZONES (SEZS) ACT

2005

Planning Legislation

Introduction Special Economic Zone (SEZ) is defined as "a specifically

delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs".

SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive financial package with the minimum possible regulations.

Government of India have notified Special Economic Zones (SEZs) Act 2005 and notified Special Economic Zone Rules 2006 with a view to develop infrastructure facilities for export.

Establishment of special economic zone

A Special Economic Zone may be established under this Act, either jointly or severally by the Central Government, State Government, or any person for manufacture of goods or rendering services or for both or as a Free Trade and Warehousing Zone.

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 purpose of setting up the Special Economic Zone.

Functions under this Act, shall be guided by…

generation of additional economic activity promotion of exports of goods and services; promotion of investment from domestic and

foreign sources; creation of employment opportunities; development of infrastructure facilities; and maintenance of sovereignty and integrity of

India, the security of the State and friendly relations with foreign States.

Processing and non-processing areas

The areas falling within the Special Economic Zones may be demarcated by the Central Government or any authority specified by it as-

(a) the processing area for setting up Units for activities, being the manufacture of goods, or rendering services; or

(b) the area exclusively for trading or warehousing purposes; or

(c) the non-processing areas for activities other than those specified under clause (a) or clause (b).

Exemption from taxes, duties or cess

Any goods or services exported out of, or imported into, or procured from the Domestic Tariff Area by,

(i) a Unit in a Special Economic Zone; or (ii) a Developer;

shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from the payment of taxes, duties or cess under all enactments specified in the First Schedule.

SEZs Typology

SEZs can be categorized on basis of sector, function or location and required to have processing as well as non-processing area.

Development Norms for Non Processing Areas in SEZ Development guidelines – Multi Product SEZ FAR – 1 Total Floor Space – 50,00,000 sqmts Floor Space utilization

Land Utilization

Activity Percentage of floor space Residential 50Commercial 25Facilities 25

Activity Percentage of floor space Residential Commercial Facilities etc.

55

Open spaces 20Circulation 25

Development Norms for Non Processing Areas in SEZ Development guidelines – Sector Specific SEZ FAR – 1 Total Floor Space – 5,00,000 sqmts Floor Space utilization

Land Utilization

Activity Percentage of floor space Residential 50Commercial 25Facilities 25


55


Development Norms for Non Processing Areas in SEZ Development guidelines – IT/ITES, Biotechnology, Gems and

Jewellery SEZ FAR – 1 Total Floor Space – 50,000 sqmts Floor Space utilization

Land Utilization

Activity Percentage of floor space

Area in Sqmt

Residential 60 250000 Commercial

15 125000

Facilities 25 125000


75


Key challenges in the SEZs program

Compensation for acquisition shall be on the basis of market prices .

Give share of acquired land in the developed area to the owners.

Provision of employment for Landless labourers . Development of SEZs needs to be integrated with

existing Master Plans and Regional Plans. There is need to develop regional/sub regional plan

around the SEZ areas.

special economic zones (sezs) act 2005

Law