| Scheme |
7.1 |
This may be called the Special Economic
Zones Scheme. |
| Definitions |
7.2 |
For the purposes of Special Economic Zone
scheme, unless the context otherwise requires, the following words
and expressions shall have the meanings attached to them as given
in the Policy. |
| Status of SEZs |
7.3.1 |
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. |
|
7.3.2 |
Goods and services going into the SEZ
area from DTA shall be treated as exports and goods and services coming
from the SEZ area into DTA shall be treated as if these are being
imported. |
|
7.3.3 |
The Special Economic Zones may have areas,
demarcated as,- (a) Processing areas for setting up of units
for production of goods and rendering of services; and
(b) non-processing areas, if any. |
| Setting up of SEZ in Private/ joint/State
Sector |
7.4.1 |
A SEZ may be set up in the public, private
or joint sector or by State Government. Guidelines for setting up
of Special Economic Zones in the public/ private/ joint Sector or
by the State Government is given in Appendix-14-IIO. |
|
7.4.2 |
Project proposal for setting up of SEZ,
recommended by the concerned State Government, shall be considered
by the Board of Approval in the Department of Commerce as given in
Appendix 14-ID. |
|
7.4.3 |
On approval of the proposal, a Letter of
Permission shall be issued to the developer for development, operation
and maintenance of SEZ as given in Appendix-14-IIP. Format
of Letter of Permission for developers engaged in operation and maintenance
of SEZ is given in Appendix-14-IIQ. |
| Registration of Developer |
7.5.1 |
The developer shall obtain RCMC from
the concerned Development Commissioner of SEZ. |
| Entitlements of SEZ Developer |
7.5.2 |
For development, operation and maintenance
of infrastructure facilities in SEZs, the developer shall be eligible
for the following entitlements:
(a) Income Tax exemption as per 80 IA of the Income Tax Act.
(b) Import/ procure goods without payment of Customs/Excise duty.
(c) Exemption from Service Tax
(d) Exemption from CST. |
|
7.6 |
Deleted. |
| Eligibility of SEZ units |
7.7.1 |
SEZ units may be set up for manufacture
of goods and rendering of services. |
| Application /Approval and Renewal of
Approval |
7.7.2 |
For setting up a unit in SEZ, three copies
of the application in the form given in Appendix-14-IA. may
be submitted to the Development Commissioner (DC) of the SEZ concerned |
|
7.7.3 |
Applications for setting up a unit in
SEZ other than proposals for setting up of unit in the services sector
(except R&D, software and IT enabled services, trading or any
other service activity as may be delegated by the BOA), shall be approved
or rejected by the Units Approval Committee within 15 days as per
the procedure indicated in Appendix-14-IB. In other cases,
approval may be granted by the Development Commissioner after clearance
by the Board of Approval. Sector specific conditions relating to the
approval are given in Appendix-14-IC. |
|
7.7.4 |
Proposals for setting up units in SEZ
requiring Industrial Licence may be granted approval by the Development
Commissioner after clearance of the proposal by the SEZ Board of Approval
and Department of Industrial Policy and Promotion within 45 days on
merits. |
|
7.7.5 |
Letter of Permission (LOP)/Letter of Intent
(LOI) issued to SEZ units as per standard format indicated at Appendix-14-IE.
shall be valid for a period of 3 years for commencement of production.
The LOP/LOI shall be valid for a period of five years from the date
of commencement of production and would be construed as a licence
for all purposes. On completion of 5 years operation, the approval
may be renewed by the Development Commissioner concerned for a period
of 5 years at a time on receipt of application for renewal from the
unit. |
|
7.7.6 |
Each LOP/LOI shall have separate ear-marked
premises and shall specify the items of manufacture/service activity,
annual capacity, projected annual export for the first five years
in dollar terms, Net Foreign Exchange Earnings (NFE), limitations,
if any, regarding sale of finished goods, by-products and rejects
in the DTA and such other matter as may be necessary and also impose
such conditions as may be required |
|
7.7.7 |
In case of any change in approved
activity or undertaking any new activity by SEZ units, the Development
Commissioner shall issue amended LOP within six days on receiving
intimation from the unit. |
| Legal Undertaking |
7.8 |
The unit shall execute a legal undertaking
with the Development Commissioner concerned in the form given in Appendix-14-IF. |
| Export |
7.9.1 |
SEZ units may export goods and services
including agro-products, partly processed goods, sub-assemblies and
components except prohibited items of exports in ITC (HS). The units
may also export by-products, rejects, waste scrap arising out of the
production process. Export of Special Chemicals, Organisms, Materials,
Equipment and Technologies (SCOMET) shall be subject to fulfillment
of the conditions indicated in the ITC (HS). |
|
7.9.2 |
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. |
|
7.9.3 |
At the time of export of jewellery, the
shipping bill and the invoice presented to the Customs authorities
shall contain the description of the items, its weight, purity of
gold/ silver/platinum, type of Gem & Jewellery stone (diamond,
ruby, sapphire, cubic zircon etc.) used for studding and studding
weight in carats, FOB price rate of the jewellery item, quantity in
pieces and total value. |
|
7.9.4 |
The SEZ unit may export jewellery on the
basis of a notional rate certificate to be issued by the nominated
agency. This rate will be based on the prevailing Gold/USD rate and
the USD/INR rate in the notional rate certificate. The certificate
issued by the nominated agency should not be older than 3 working
days of the date of Shipment. |
|
7.9.5 |
The exporter shall have the flexibility
to fix the price and repay the gold loan within 60 days from the date
of export. The price shall be communicated to the nominated agencies
who will issue a certificate showing the final confirmation of the
rate to the bank negotiating the document, to ensure export proceeds
are realized at this rate. |
|
7.9.6 |
Software units may undertake exports using
data communication links or in the form of physical exports (which
may be through courier service also), including export of professional
services.
|
| Import/domestic procurement |
7.10.1 |
SEZ unit may import/procure from the DTA
without payment of duty all types of goods and services, including
capital goods, 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). However, if any permission is required
for import under any other law, the same shall be allowed with the
approval of the Board of Approval. 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. |
|
7.10.2 |
In case of doubt as to whether the item
is required by the unit for its activities or in connection therewith,
the decision of the concerned Development Commissioner shall be final. |
|
7.10.3 |
The import shall be subject to the following
conditions: |
|
|
| (a) |
The goods shall be imported into
the premises of the unit. |
| (b) |
The procedure as prescribed
under Customs/ Excise rules for SEZ will be followed and general
bond executed with Customs/Excise authority. |
| (c) |
Goods already imported/shipped/
arrived before the issue of Letter of Permission (LOP)/Letter
of Intent (LOI) are also eligible for duty free clearance under
the SEZ scheme provided customs duty has not been paid and the
goods have not been cleared from Customs |
|
|
7.10.4 |
SEZ units may procure goods required by
it without payment of duty, from bonded warehouses in the DTA set
up under the Policy and/or under Section 65 of the Customs Act from
International Exhibitions held in India. |
|
7.10.5 |
SEZ units, may import/procure from DTA,
without payment of duty, all types of goods for creating a central
facility for use by units in SEZ. The Central facility for software
development can also be accessed by units in the DTA for export of
software. |
|
7.10.6 |
Gem and Jewellery units may also source
gold/ silver/ platinum through the nominated agencies. |
|
7.10.7 |
SEZ units obtaining gold/silver/ platinum
from the nominated agencies on loan basis shall export gold/ silver/platinum
jewellery within 60 days from the date of release. This shall not
however apply to the outright purchase of precious metal from the
nominated agencies. |
|
7.10.8 |
SEZ units may import/procure goods and
services from DTA without payment of duty for setting up, operation
and maintenance of units in the Zone. |
|
7.10.9 |
Goods, except capital goods and spares,
shall be utilized within the approval period of 5 years. |
| Leasing of Capital Goods |
7.11.1 |
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. |
|
7.11.2 |
Capital goods procured from indigenous
sources on the basis of lease agreement between the leasing company
and the SEZ unit will be eligible for Central Excise exemption |
|
7.11.3 |
The value of imported capital goods financed
through leasing companies or obtained free of cost and/or loan basis
shall also be taken into account for the purpose of calculation of
Net Foreign exchange Earning (NFE). |
| Net Foreign Exchange Earnings (NFE) |
7.12.1 |
SEZ unit shall be a positive Net Foreign
Exchange Earner. Net Foreign Exchange Earnings (NFE) shall be calculated
cumulatively for a period of five years from the commencement of production
according to the following formula:
Positive NFE = A – B >0
Where:
A : is the FOB value of exports by the SEZ unit; and
B: is the sum total of the CIF value of all imported inputs and
the CIF value of all imported capital goods, and the value of all
payments made in foreign exchange by way of commission, royalty,
fees, dividends, interest on external borrowings during the first
five year period or any other charges. "Inputs" mean raw materials,
intermediates, components, consumables, parts and packing materials. |
|
7.12.2 |
If any goods are obtained from another
SEZ/EOU/ EHTP/ STP unit or bonded warehouses or procured from an international
exhibitions held in India or precious metals procured from nominated
agencies or from advance licencing holder in fulfillment of his export
obligation, the value of such goods shall be included under B. |
|
7.12.3 |
If any capital goods imported duty
free or leased from a leasing company, received free of cost and/or
on loan basis or transfer, the CIF value of the capital goods shall
be included pro-rata, under B for the period it remains with the unit. |
|
7.12.4 |
For annual calculation of NFE, the value
of imported capital goods and lumpsum payment of foreign technical
know-how fee shall be amortized as under; 1st –10th Year
: 10% each year |
| Maintenance of accounts |
7.13.1 |
SEZ unit shall maintain proper account,
and shall submit quarterly and annual report as prescribed in annexures
to Appendix-14-IF to the Development Commissioner/Customs. |
|
7.13.2 |
The unit shall be able to account for
the entire quantity of each category of homogenous goods imported/procured
duty free, by way of exports, sales/supplies in DTA or transfer to
other SEZ/EOU/EHTP/STP units and balance in stock. However, at no
point of time the units shall be required to co-relate every import
consignment with its exports, transfer to other SEZ/ EOU/ EHTP/STP
units, sales in the DTA and balance in stock. Any matter for clarification
as to whether goods are homogenous or not shall be decided by the
Unit Approval Committee. The unit approval committee shall also
review imported/domestically procured goods not utilized within five-year
period as part of annual performance review. |
| Monitoring of performance |
7.14.1 |
The performance of SEZ units shall be
monitored by the Unit Approval Committee as per the guidelines given
in Appendix-14-IG. |
|
7.14.2 |
Failure to ensure positive NFE or to abide
by any of the terms and conditions of the LOP/LUT shall render the
unit liable to penal action under the provisions of the Foreign Trade
(Development & Regulation) Act, 1992 and the Rules and Orders
made there under without prejudice to action under any other law/rules
and cancellation or revocation of LOP. |
| DTA Sale and Supplies |
7.15.1 |
(a) SEZ unit may sell goods, including
by-products, and services in DTA in accordance with the import policy
in force, on payment of applicable duties. |
|
7.15.2 |
DTA sale by service/trading unit shall
be subject to achievement of positive NFE cumulatively. Similarly
for units undertaking manufacturing and services/ trading activities
against a single LOP, DTA sale shall be subject to achievement of
NFE cumulatively. |
|
7.15.3 |
Scrap/waste/remnants/rejects arising out
of production process or in connection there with may be sold in the
DTA on payment of applicable duty. |
|
7.15.4 |
Scrap/dust/sweeping of gold/silver/platinum
may be sent to the Government of India Mint/Private Mint from the
SEZ units and returned to them in standard bars in accordance with
the procedure prescribed by the Customs authorities or may be permitted
to be sold in the DTA on payment of applicable Customs duty, on the
basis of gold/silver/platinum content, as may be notified by Customs
authorities. |
| DTA Supplies to count towards NFE |
7.16.1 |
The following supplies effected in
DTA by SEZ units will be counted for the purpose of fulfillment of
positive NFE: |
|
|
| (a) |
Supplies effected in DTA to holders
of advance licence for annual requirement/DFRC under the duty
exemption/remission scheme/FPCG scheme. |
| (b) |
Supplies made to free trade
Warehousing set up under the Policy and/or under Section 65
of the Customs Act where payment is received in free foreign
exchange. |
| (c) |
Supplies against special entitlements
of duty free import of goods. |
| (d) |
Supplies of goods and services
to such organizations which are entitled for duty free import
of such items in terms of general exemption notification issued
by the Ministry of Finance |
| (e) |
Supply of services (by services
units) relating to exports paid for in free foreign exchange
or for such services rendered in Indian Rupees which are otherwise
considered as having been paid for in free foreign exchange
by RBI. |
| (f) |
Supplies of Electronic and
IT Hardware items, having zero Customs duty provided the items
are manufactured in the unit. |
|
| Supplies to other EOU/STP/EHTP/SEZ units |
7.16.2 |
Supplies to other EOU/SEZ/ EHTP/ STP units
shall also be counted towards NFE provided that such goods are permissible
for procurement by units. |
| Entitlement for Supplies from the DTA |
7.17.1 |
DTA supplier to SEZ shall be entitled for:-
(a) Drawback orDEPB in lieu of Drawback
(b) Discharge of export performance, if any. |
|
7.17.2 |
Notwithstanding the above, SEZ units/SEZ
Developer shall, on production of a suitable disclaimer from the DTA
supplier, be eligible for obtaining the entitlement of Drawback or
DEPB in lieu of Drawback. |
|
7.17.3 |
SEZ units shall be entitled for:- |
|
|
| (a) |
Exemption from Central Sales
Tax; |
| (b) |
Exemption from payment of Central
Excise Duty on all goods eligible for procurement. |
| (c) |
Reimbursement of Central Excise
Duty, including additional excise duty, if any, paid on bulk
tea procured from licenced auction centers by Development Commissioner
of concerned Zone so long as levy on bulk tea in this regard
is in force. The unit shall submit documentary evidence showing
that the tea was procured from licenced auction centers along
with the claim. |
| (d) |
Reimbursement of Duty paid
on fuels or any other goods procured from DTA as per the rate
of drawback notified by the Directorate General of Foreign Trade
from the date of such notification. |
|
|
7.17.4 |
Supplier of precious and semi-precious
stones, synthetic stones and processed pearls from Domestic Tariff
Area to the units situated in SEZ shall be eligible for grant of Replenishment
Licenses at the rates and for the items mentioned in of the Handbook
(Vol. I). |
|
7.17.5 |
The procedure for submission of application
for grant of Replenishment Licence for cut and polished diamonds,
precious and semi-precious stones, synthetic stones and processed
pearls shall be as contained in the Policy. However, the application
shall be made to the Development Commissioner of the SEZ concerned. |
|
7.17.6 |
The entitlements under paragraph 7.17.1
and 7.17.3 (b) above shall be available provided the goods supplied
are manufactured in India. |
| Export through Status holder |
7.18 |
SEZ unit may also export goods manufactured
or software developed by it, through a merchant exporter/ status holder
recognized under this Policy or any other EOU/SEZ/ EHTP/STP unit subject
to following conditions: |
|
|
| (a) |
The goods/software shall be produced/developed
in the SEZ unit concerned. |
| (b) |
The level of NFE or any other
conditions relating to the imports and exports as prescribed
shall continue to be discharged by the SEZ unit concerned. |
| (c) |
The export orders so procured shall
be executed within the parameters of SEZ Scheme and the goods
shall be directly transferred from the SEZ unit to the port
of shipment. |
| (d) |
Fulfillment of positive NFE by SEZ
unit in regard to such exports shall be reckoned on the basis
of the price at which the goods and services are supplied by
SEZ units to the status holder/merchant exporter or other EOU/
EPZ/SEZ/ EHTP/ STP unit. |
| (e) |
All export entitlements, including
recognition as status holder would accrue to the exporter in
whose name foreign exchange earnings are realized. However,
such export shall be counted towards fulfillment of obligation
under SEZ scheme only. |
|
| Inter-unit Transfer |
7.19.1 |
SEZ units may transfer goods, including
partly processed/semi-finished goods and services from one SEZ unit
to another SEZ/EOU/ EHTP/STP unit. However, trading units in SEZ may
sell/transfer imported goods to another SEZ/EOU/EHTP/STP units. |
|
7.19.2 |
Goods imported/procured by a SEZ unit
may be transferred or given on loan to another unit within the same
SEZ, which shall be duly accounted for, but not counted towards discharge
of export performance. |
|
7.19.3 |
Capital goods imported/procured may be
transferred or given on loan to another SEZ/EOU/ EHTP/ STP unit with
prior permission of the Development Commissioner and Customs Authorities. |
|
7.19.4 |
Transfer of goods as per paragraphs 7.19.1
and 7.19.2 within the same SEZ shall not require any permission but
the units shall maintain proper accounts of the transaction. |
| Other Entitlements |
7.20.1 |
Units set up in SEZs established by the
Government will be charged rent for lease of industrial plots and
standard design factory buildings/ sheds as per rates fixed from time
to time. |
|
7.20.2 |
Exemption from Service tax. |
|
7.20.3 |
Exemption from income tax as per the provisions
of the Income Tax Act. |
|
7.20.4 |
FOB Value of export of a SEZ unit can
be clubbed with FOB value of export of its parent company in the DTA,
or vice versa, for the purpose of according Export House, Trading
House, Star Trading House or Super Star Trading House status; |
|
7.20.5 |
Foreign Equity up to 100% is permissible
for all manufacturing activities under automatic route except for
the following:
- arms and ammunition, explosives and allied items of defence
equipment, defence aircraft and warships
- atomic substances;
- narcotics and psychotropic substances and hazardous chemicals
- distillation and brewing of alcoholic drinks; and
- cigarettes/cigars and manufactured tobacco substitutes
|
|
7.20.6 |
Sectoral norms as notified by the Government
shall apply to foreign investment in services and trading activities |
|
7.20.7 |
SEZ units may retain 100% of their export
proceeds in their EEFC account. |
|
7.20.8 |
Export value of goods, software and services
by SEZ units may be realized and repatriated to India as per the RBI
instructions in the matter. |
|
7.20.9 |
Software units may, in addition, also
be allowed to use the computer system for training purpose (including
commercial training) subject to the condition that no computer terminal
shall be installed outside the Zone premises for the purpose |
|
7.20.10 |
Procurement of raw materials and export
of finished products shall be exempt from Central levies. |
|
7.20.11 |
Exemption from Industrial Licensing for
manufacture of items reserved for SSI sector |
|
7.20.12 |
State Trading Enterprises Policy shall
not apply to SEZ manufacturing units. Export of iron ore shall however
be subject to the decision of the Government from time to time. Requirements
of other conditions like minimum export price/export in consumer pack
as per Exim Policy shall apply in case the raw materials are indigenous
and exported without further processing/manufacturing by the SEZ unit.
Export of textile items shall be covered by bilateral agreements,
if any. Wood based units shall comply with the direction of Hon'ble
Supreme Court contained in its order dated 12.12.1996 in Writ (civil)
No, 202 of 1995- T.N.Godavarman Thirrumulppad v/s Union of India and
others with WP(Civil) no 171 of 1996 in regard to use of timber/other
wood. |
|
7.20.13 |
SEZ unit may install one fax machine at
a place of its choice, outside the Zone, subject to intimation of
its location to the concerned Customs/Central Excise authorities. |
|
7.20.14 |
SEZ units may, temporarily take out of
the Zone duty free laptop computers and video projection systems for
working upon by persons authorised by unit |
|
7.20.15 |
SEZ units may install personal computers
not exceeding two in number imported/ procured duty free in the registered/administrative
office subject to the guidelines issued by Department of Revenue in
this behalf |
|
7.20.16 |
For IT and IT enabled services, persons
authorized by the software units may access the facility installed
in the SEZ unit through communication links. |
| Sub- Contracting |
7.21.1 |
SEZ unit, including gem and jewellery
units, may subcontract a part of their production or production process
through units in the DTA or through other SEZ/EOU/EHTP/ STP units
with the annual permission of Customs authorities. Subcontracting
of part of production process may also be permitted abroad with the
approval of the Development Commissioner. |
|
7.21.2 |
All units, including gem and jewellery,
may sub-contract part of the production or production process through
other units in the same SEZ without permission of Customs authorities
subject to records being maintained by both the supplying and receiving
units |
|
7.21.3 |
Sub-contracting by SEZ gems and jewellery
units through units in other SEZ or EOUs or units in DTA shall be
subject to following conditions:- |
|
|
| (a) |
Goods, finished
or semi-finished, including studded jewellery, taken outside
the zone for sub- contracting shall be brought back to the unit
within 90 days. |
| (b) |
No cut and polished
diamonds, precious and semi-precious stones (except precious/semi-precious
stones and synthetic stones having zero duty) shall
be allowed to be taken outside the zone for sub-contracting. |
| (c) |
Receive plain gold/silver/platinum
jewellery from DTA/EOU/SEZ units in exchange of equivalent quantity
of gold/silver/ platinum and the wastage thereon as may
be notified, as the case may be, contained in the said jewellery. |
| (d) |
SEZ units shall
be eligible for wastage as applicable for sub-contracting and
against exchange |
|
|
7.21.4 |
Scrap/waste/remnants generated through
job work may be cleared from the job worker’s premises on payment
of applicable duty or destroyed in the presence of Customs/Excise
authorities or returned to the unit. Destruction shall not apply to
gold, silver, platinum, diamond, precious and semi precious stones. |
|
7.21.5 |
Export of finished goods from the job
worker's premises may be permitted provided such premises are registered
with the Central Excise authorities. Where the job worker is SEZ/EOU/EHTP/STP
unit, no such excise registration is required and export may be effected
either from the job workers’ premises or from the premises of the
unit. Export of such products from the job worker's premises shall
not be allowed through third parties as provided in the Policy. |
|
7.21.6 |
SEZ units may, on the basis of annual permission
from the Customs authorities, undertake jobwork for export, on behalf
of DTA exporter, provided the finished goods are exported directly
from SEZ units and export document shall jointly in the name of DTA/SEZ
unit. For such exports, the DTA units will be entitled for refund
of duty paid on the inputs by way of Brand Rate of duty drawback. |
|
7.21.7 |
SEZ units may be permitted to remove moulds,
jigs, tools, fixtures, tackles, instruments, hangers and patterns
and drawings to the premises of sub-contractors, subject to the conditions
that these shall be brought back to the premises of the units on completion
of the job work within a stipulated period. The raw materials may
or may not be sent along with these goods. |
|
7.21.8 |
In case of sub-contracting of production
process abroad, the goods may be exported from the sub-contractor
premises subject to the conditions that job work charges shall be
declared in the export declaration forms, invoices etc. and full repatriation
of foreign exchange shall be ensured by the SEZ unit. |
| Contract Farming |
7.21.9 |
SEZ units engaged in production/processing
of agriculture/horticulture products, may on the basis of annual permission
from the Customs authorities take out inputs and equipments (specified
at Appendix-14-IJ to the DTA farm subject to the following conditions: |
|
|
| (a) |
Supply of inputs by the SEZ
to the contract farm(s) shall be subject to the input-output
norms approved by the DGFT/BOA. |
| (b) |
There shall be contract farming
agreement between the SEZ and the DTA farmer(s); |
| (c) |
The unit has been in existence
for at least two years and engaged in export of agriculture/horticulture
products; otherwise it shall furnish bank guarantee equivalent
to the duty foregone on the capital goods/inputs proposed to
be taken out to the Deputy/Assistant Commissioner of Customs/Central
Excise till the unit completes two years. |
|
| Export Through Exhibitions |
7.22.1 |
SEZ units may export goods for holding/
participating in exhibitions abroad with the permission of Development
Commissioner subject to the following conditions |
|
|
| (a) |
the unit shall produce to the
Customs authorities the letter in original or its certified
copy containing approval of the Development Commissioner. For
gems and jewellery items, a self-certified photograph of the
products shall also be submitted. |
| (b) |
in case of re-import, such
items on arrival shall be verified along with the export documents
before clearance |
| (c) |
items not sold abroad shall
be re-imported within 60 days of the close of the exhibition.
However, in case the exporter is participating in more than
one exhibition within 45 days of close of the first exhibition,
then the 60 days shall be counted from the date of close of
the last exhibition. |
| (d) |
In case of personal carriage
of goods and for holding/participating in overseas exhibitions,
the value of gems and jewellery shall not exceed US $ 2 million |
|
| Personal Carriage of gems and jewellery
for Export promotion tours |
7.22.2 |
Personal carriage of gold/silver/ platinum
jewellery, cut and polished diamonds, precious, semi-precious stones,
beads and articles as samples upto US $ 100,000 for export promotion
tours and temporary display/sale abroad by SEZ units is also permitted
with the approval of the Development Commissioner subject to the following
conditions:
- SEZ units shall bring back the goods or repatriate the sale
proceeds within 45 days from the date of departure through normal
banking channel
- The unit shall declare personal carriage of such goods
to the Customs while leaving the country and obtain necessary
endorsement.
|
| Export through show rooms abroad /Duty
Free Shops |
7.23.1 |
Export of goods is also permitted for
display/sale in the permitted shops set up abroad or in the show rooms
of their distributors/agents. The items not sold abroad within 180
days shall be re-imported within 45 days. |
|
7.23.2 |
SEZ unit may set up show rooms/retail outlets
at the International Airports for sale of goods in accordance with
the procedure laid down by the Customs authorities. The items remaining
unsold after a period of 60 days shall be exported or returned to
the respective SEZ units. |
| Personal carriage of Import/Export Parcels
including through foreign bound passengers |
7.24.1 |
Import/ export through personal carriage
of gem and jewellery items may be under-taken as per the procedure
prescribed by Customs. The export proceeds shall, however, be realized
through normal banking channel. Import/export through personal carriage
for units , other than gem and jewellery units, shall be allowed provided
the goods are not in commercial quantity. |
|
7.24.2 |
For Personal carriage of goods by foreign
bound passenger, the following documents shall be submitted by SEZ
units as proof of exports. |
|
|
| (a) |
Copy of the shipping bill filed
by the SEZ units; |
| (b) |
A copy of the Currency Declaration
Form filed by the Foreign buyer with the Customs at the time
of his arrival; and |
| (c) |
Foreign Exchange Realisation/
Encashment Certificate from the Bank. |
| (d) |
Personal carriage of parts
by foreign bound passenger shall also be allowed in case the
same are required for repairs of exported goods at customer
site. The following documents shall be submitted as proof of
export:
- permission letters from Customs for exports.
- Invoice with value (for payment or free of charge).
|
|
|
7.24.3 |
In addition to this, Personal Carriage
by foreign bound passenger on Document Against Acceptance (DA)/Cash
On Delivery (COD) basis is also allowed. The SEZ units will have to
furnish the following documents as proof of export.
(a) Copy of Shipping Bill.
(b)Bank Certificate of Export and Realisation. |
|
7.24.4 |
The procedure for personal carriage
of import parcels will be the same as for import of goods by airfreight
except that the parcels shall be brought to the Customs by the SEZ
unit/ foreign national for examination and release. Instructions issued
by the Customs authorities in this regard should be followed mutatis
mutandis. |
| Export/Import by Post / Courier |
7.25 |
Goods including free samples, may be exported/imported
by airfreight or through Foreign Post Office or through courier subject
to the procedures prescribed by Customs.
Replacement/ Repair of Goods 7.26.1 The general provisions of Policy
relating to export of replacement/ repaired goods shall apply equally
to SEZ units, save that, cases not covered by these provisions shall
be considered on merits by the Development Commissioner. |
|
7.26.2 |
The units may send capital goods abroad,
for repair and return. Any foreign exchange payment for this purpose
will also be allowed. |
|
7.26.3 |
The goods sold in the DTA and to be defective
may be brought back for repair or replacement under intimation to
the Development Commissioner. |
|
7.26.4 |
Goods or parts thereof, on being imported/
indigenously procured and found defective or otherwise unfit for use
or which have been damaged or become defective after import/ procurement
may be returned and replacement obtained or destroyed. In the event
of replacement, the goods may be brought back from the foreign suppliers
or their authorised agents in India or the indigenous suppliers. However,
destruction shall not apply to precious and semi-precious stones and
precious metals. |
|
7.26.5 |
Goods may be transferred to DTA/abroad
for repair/ replacement, testing or calibration, quality testing and
R & D purpose under intimation to Customs authorities and subject
to maintenance of records. |
|
7.26.6 |
SEZ units may transfer goods for quality
testing/R & D purpose to any recognized laboratory/ institution,
upto Rs 5 lakhs per annum without payment of duty, on giving suitable
undertaking to the customs for return of the goods. However, if the
goods have been consumed/destroyed in the process of testing etc.
a certificate from the laboratory/ institution to this effect shall
be furnished to the Customs. |
| Samples |
7.27.1 |
SEZ units may, on the basis of records
maintained by them, and on prior intimation to Customs authority supply
or sell samples in the DTA for display/market promotion on payment
of applicable duties. |
|
7.27.2 |
SEZ units may also remove samples to DTA
without payment of duty under prior intimation to the Customs authorities
subject to the condition that the goods shall be brought back within
a stipulated period. |
|
7.27.3 |
SEZ units may export free samples, without
any limit, including samples made in wax moulds, silver mould and
rubber moulds through all permissible mode of export including through
couriers agencies/post. |
| Sale of unutilized material/destruction |
7.28.1 |
In case a SEZ unit is unable, for valid
reasons, to utilize the goods, and services, imported or procured
from DTA, it may be transferred to other EOU/SEZ/EHTP/STP units or
disposed off in the DTA on payment of applicable duties and submission
of import license by DTA unit, wherever applicable or exported. Such
transfer from SEZ unit to another SEZ/EOU/EHTP/STP unit would be treated
as import for the receiving unit. |
|
7.28.2 |
Capital goods and spares that have become
obsolete/surplus may either be exported, transferred to another SEZ/EOU/EHTP/STP
unit or disposed of in the DTA on payment of applicable duties. The
benefit of depreciation, as applicable will be available in case of
disposal in DTA. |
|
7.28.3 |
SEZ unit may be allowed by Customs authorities
concerned to donate imported/ indigenously procured (bought or taken
on loan) computer and computer peripherals, including printer, plotter,
scanner, monitor, key-board and storage units without payment of duty,
two years after their import/procurement and use by the units, to
recognized non-commercial educational institutions, registered charitable
hospitals, public libraries, public funded research and development
establishments, organisations of the Government of India or Government
of a State or Union Territory as per Custom/ Central Excise notification
issued in this regard. |
|
7.28.4 |
No duty shall be payable in case
capital goods, raw material, consumables, spares, goods manufactured,
processed or packaged and scrap/waste/ remnants/rejects are destroyed
within the Zone after intimation to the Custom authorities or destroyed
outside the Zone with the permission of Custom authorities. Destruction
as stated above shall not apply to gold, silver, platinum, diamond,
precious and semi precious stones. |
| Self-Certification |
7.29 |
All activities of SEZ units within the
Zone, unless otherwise specified, including export and re-import of
goods shall be through self certification procedure. |
| Distinct identity |
7.30 |
If an industrial enterprise is operating
both as a domestic unit as well as an SEZ unit, it shall have two
distinct identities with separate accounts, including separate bank
accounts. It is, however, not necessary for it to be a separate legal
entity, but it should be possible to distinguish the imports and exports
or supplies effected by the SEZ units from those made by the other
units of the enterprise. |
| Powers of Units Approval Committee |
7.31 |
The powers and functions of the
Unit Approval Committee notified by the Government (Appendix-14-IIR)
shall be as under: |
|
|
| (a) |
To consider the applications for
setting up of units in SEZ other than proposals for setting
up of unit in the services sector (except R&D, software
and IT enabled services, trading or any other service activity
as may be delegated by the BOA) and items of manufacture requiring
industrial licence under the Industrial (Development & Regulation)
Act, 1951 shall be considered by the BOA; |
| (b) |
To consider and permit conversion
of EOU into SEZ unit; |
| (c) |
to monitor the performance
of the Units; |
| (d) |
to supervise and monitor permission,
clearances, licences granted to the units and take appropriate
action in accordance with law; |
| (e) |
to call for information required
to monitor the performance of the unit under the permission,
clearances, licence granted to it; |
| (f) |
to perform any other function
delegated by the Central Government or its agencies. |
| (g) |
to perform any other function
delegated by the State Governments or its agencies. |
| (h) |
to grant all approvals and clearances
for the establishment and operation of Units in the Special
Economic Zone. |
|
| Management of SEZ |
7.32.1 |
SEZ will be under the administrative control
of the Development Commissioner
|
| Registration-cum-Member-ship Certificate |
7.32.2 |
Registering authority for SEZ units, shall
be the Development Commissioner of the SEZ concerned. A separate Registration-cum-Membership
Certificate shall not be required in their cases as provided for in
the Policy. However, SEZ units may also obtain RCMC from the Export
Promotion Council for EOU & SEZ units. |
| Powers of the Development Commissioner |
7.32.3 |
Apart from the original power delegated
elsewhere, the Development Commissioners of SEZ will exercise the
following powers in respect of SEZ units. Jurisdiction of Development
Commissioners is given in Appendix-14-IK. |
| Importer-Exporter Code No. |
|
| (a) |
allot Importer-Exporter code number
for SEZ units and SEZ developer. |
| (b) |
Approve all matters relating
to post approval operation of the unit including import/procurement
of additional capital goods, increase in value of capital goods
on account of foreign exchange rate fluctuations, enhancement
of production capacity, broad banding/diversification, change
in name of the company or the implementing agency and change
from a company to another provided the new implementing agency
/company undertakes to take over the assets and liabilities
of the existing unit and merger of two or more SEZ units. |
| (c) |
Cancel LOP/ LOI/IL wherever
warranted. |
| (d) |
Adjudication under Section
13 read with Section 11 of Foreign Trade (Development &
Regulation) Act, 1992 in respect of SEZ units. |
| (e) |
Action under the Public Premises
Eviction Act in case the rent on the plot/built up premises
allotted to the units is in arrears or if the plot/shed is not
utilised for the purpose for which the same has been allotted. |
| (f) |
Valuation of exports declared
on SOFTEX form by the units located in Special Economic Zones. |
| (g) |
Issuing eligibility certificates
for grant of employment visa to low level foreign technicians
to be engaged by SEZ units. |
| (h) |
Issue of Green Card after execution
of Legal Undertaking by the unit. |
| (i) |
Import of second hand capital goods
without age restrictions.(h) Grant/renew Status Holder Certificate
in respect of SEZ units provided it does not involve clubbing
of FOB value of exports of its parent company in the DTA. |
|
| Exit from SEZ scheme |
7.33.1 |
SEZ unit may opt out of the scheme with
the approval of the Development Commissioner. Such exit from the scheme
shall be subject to payment of applicable Customs and Excise duties
on the imported and indigenous capital goods, raw materials etc. and
finished goods in stock. In case the unit has not achieved positive
NFE, the exit shall be subject to penalty, that may be imposed by
the adjudicating authority under Foreign Trade (Development and Regulation)
Act, 1992. |
|
7.33.2 |
Broad conditions governing exit of units
from the SEZ scheme are indicated at Appendix-14-IL. |
|
7.33.3 |
In the event of a gem and jewellery unit
ceasing its operation, gold and other precious metals, alloys, gem
and other materials available for manufacture of jewellery, shall
be handed over to an agency nominated by the Ministry of Commerce
and Industry (Department of Commerce) at the price to be determined
by that agency. |
|
7.33.4 |
SEZ unit may also be permitted by the
Development Commissioner, as one time option, to exit from SEZ scheme
on payment of duty on capital goods under the prevailing EPCG Scheme,
subject to the unit satisfying the eligibility criteria of that Scheme
and standard conditions, as per paragraph above. |
| Depreciation norms for Capital goods |
7.33.5 |
The depreciation upto 100% is permissible
for computer and computer peripherals in 5 years and in case of others
capital goods in 10 years, as per the norms notified by the Department
of Revenue. |
|
7.33.6 |
Depreciation for computers and computer
peripherals shall be as follows:
10% for every quarter in the first year,
8% for every quarter in the 2nd year,
5% for every quarter in the 3rd year
1% for every quarter in the fourth and fifth year. |
|
7.33.7 |
For capital goods, other than the
above, the depreciation rate would be as follows:-
4% for every quarter in the first year;
3% for every quarter for the second and thrid year;
2.5% for every quarter for the fourth and fifth year; and
2% for every quarter thereafter. |
|
7.33.8 |
Clearance of capital goods imported
as second hand shall be allowed as per the Policy under EPCG Scheme.
In respect of second hand capital goods which are less than 10 years
old on date of import, clearance in the DTA may be allowed, on payment
of applicable duties, after 2 years from the date of import. In addition,
where the second hand capital goods are more than 10 years old, clearance
in the DTA may be allowed only against an import licence and payment
of applicable duties. |
| Revival of Sick units |
7.34 |
Subject to a unit being declared sick by
the appropriate authority, proposals for revival of the unit or its
take over may be considered by the Board of Approval as per guidelines
in Appendix-14-IM. |
| |
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