| Objective |
7A.1 |
The objective is to create trade-related
infrastructure to facilitate the import and export of goods and services
with freedom to carry out trade transactions in free currency. The
scheme envisages creation of world-class infrastructure for warehousing
of various products, state-of-the-art equipment, transportation and
handling facilities, commercial office-space, water, power, communications
and connectivity, with one-stop clearance of import and export formality,
to support the integrated Zones as ‘international trading hubs’.
These Zones would be established in areas proximate to seaports, airports
or dry ports so as to offer easy access by rail and road. |
| Status |
7A.2 |
The Free Trade & Warehousing Zones (FTWZ) shall
be a special category of Special Economic Zones with a focus on trading
and warehousing. |
| Establishment of Zone |
7A.3 |
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| (i) |
Proposals for setting up of FTWZs may be made
by public sector undertakings or public limited companies or
by joint ventures in technical collaboration with experienced
infrastructure developers. The proposals shall be considered
by the Board of Approval in the Department of Commerce. On approval,
the developer will be issued a letter of permission for the
development, operation and maintenance of such FTWZ. |
| (ii) |
Foreign Direct Investment would be permitted up to 100% in
the development and establishment of the zones and their infrastructural
facilities. |
| (iii) |
The proposal must entail a minimum outlay of Rs.100 crores
for the creation and development of the infrastructure facilities,
with a minimum built up area of five lakh sq.mts. |
| (iv) |
The developer shall be permitted to import duty free such
building materials and equipment as may be required for the
development and infrastructure of the zone. Such equipment and
materials as are sourced from the DTA shall be considered as
physical exports for the DTA suppliers. |
| (v) |
Once it has developed the FTWZ, the developer shall also be
permitted to sale/lease/rent out warehouses/workshops/office-space
and other facilities in the FTWZ to traders/exporters. |
|
| Maintenance of Zone |
7A.4 |
The developer shall itself or through
suitable special purpose arrangements, ensure a reliable mechanism
for the proper maintenance of the common facilities and security of
the FTWZ. |
| Functioning |
7A.5 |
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| (i) |
The scheme envisages duty free import of all goods
(except prohibited items, arms and ammunitions, hazardous wastes
and SCOMET items) for ware housing. As far as bond towards customs
duty on import is concerned, the units would be subject to similar
provisions as are applicable to units in SEZs. |
| (ii) |
Such goods shall be permitted to be re-sold/re-invoiced or
re-exported. Re-export shall be permitted without any restrictions.
However export of SCOMET items shall not be permitted except
with the permission of Inter-Ministerial Committee. |
| (iii) |
These goods shall also be permitted to be sold in the DTA
on payment of customs duties as applicable on the date of such
sale. Payment of duty will become due only when goods are sold/delivered
to DTA and no interest will be charged as in the case of bonded
warehouses. |
| (iv) |
Packing or re-packing without processing, and labeling as
per customer or marketing requirements could be undertaken within
the FTWZ. |
| (v) |
The maximum period that goods shall be permitted to be warehoused
within the FTWZ will be two years, after which they shall necessarily
have to be re-exported or sold in the DTA. On expiry of the
two year period, customs duties as applicable would automatically
become due unless the goods are re-exported within such grace
period, not exceeding three months, as may be permitted. |
|
| Entitlement of units |
7A.6 |
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(i) Income Tax exemption as per 80 IA of the Income
Tax Act.
(ii) Exemption from Service Tax.
(iii) Free foreign exchange currency transactions would be permitted.
(iv) Other benefits mutatis mutandi as applicable to units in SEZs. |
| NFE criteria |
7A.7 |
Units in FTWZs shall be net foreign exchange earners.
Net foreign exchange earning shall be calculated cumulatively for
every block of five years from the commencement of warehousing and/or
trading operations as per formula. applicable for SEZ units. |
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