Lok Sabha Question No. 163 (STARRED), answered on 2016-11-28
Subject: SEZ Policy
Ministry: COMMERCE AND INDUSTRY
Asked by: BHAVANA GAWALI (PATIL)

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA STARRED QUESTION NO. 163(H) TO BE ANSWERED ON 28 th  NOVEMBER, 2016

## SEZ POLICY

## *163 (H). SHRIMATI BHAVANA PUNDALIKRAO GAWALI (PATIL):

Will the Minister of COMMERCE & INDUSTRY ( वाͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) the salient features of the current Special Economic Zones (SEZ) Policy;
- (b) the details of the concessions including tax concessions and the associated benefits being provided to SEZs and the units established thereunder;
- (c) whether  the  Government  proposes  to  review  the  issue  of  broadening  the  range  of  tax concessions for SEZs;
- (d) if so, the details thereof along with the steps taken by the Government in this regard; and
- (e) the details of the investments made in SEZs so far and the employment generated as a result thereof along with the steps being taken to ensure maximum investment in SEZs?

## ANSWER

okf.kT; ,oa m|ksx jkT; ea=h ¼Jherh fueZyk lhrkje.k½ ¼Lora= izHkkj½

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- a) to  e):  A Statement is laid on the Table of the House.

*****

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED QUESTION NO.163(H)   FOR ANSWER ON 28 th  NOVEMBER, 2016 REGARDING 'SEZ POLICY'

- (a): The salient features of the SEZ Policy as per  The Special Economic Zones Act, 2005 are: -
- (i) SEZ is a designated duty free enclave to be treated as a territory outside the customs territory of India ;
- (ii) SEZ Developers  and Units will have Direct Tax and Indirect Tax concessions as prescribed in the SEZs Act, 2005.
- (iii) No licence will be required for import of inputs for operations in SEZ ;
- (iv) Domestic sales by SEZ units will be subject to  applicable customs duties and Foreign Trade Policy in force;
- (v) SEZ units will have freedom for subcontracting;
- (vi) No routine examination by customs authorities of export/import cargo;
- (vii)  The Unit in SEZ shall achieve Positive Net Foreign Exchange to be calculated cumulatively for a period of five years from the commencement of production;
- (b): Main fiscal concessions and duty benefits allowed to SEZ developers and units are as follows:
- i. Exemption from Central Sales Tax.
- ii. Exemption from Service Tax.
- iii. Exemption from Income Tax for 15 years as per Income Tax Act
- iv. Duty free import/domestic procurement of goods
- v. Exemption  from  State  sales  tax  and  other  levies  as  extended  by  the respective State Governments.
- (c) & (d): There  is  no  proposal  at  present  for  broadening  the  range  of  tax concessions for SEZs.
- (e): As  on  30.09.2016,  an  investment  of  Rs  4,06,690  crore  has  been  made  in different  SEZs  and  an  employment  for  about  16.88  lakh  persons  has  been generated. The following initiatives have been taken in recent years for promotion of investment in SEZs:
- i. Minimum  Land  Area  requirement  for  setting  up  of  new  SEZs  has  been reduced to 50% for Multi-product and Sector-specific SEZs.
- ii. Sectoral broad-banding has been introduced to encompass similar / related areas under the same Sector.
- iii. A  new sector 'agro-based food processing' sector has been introduced to encourage agro-based industries in SEZs.
- iv. Dual use of facilities like Social & Commercial infrastructure by SEZs and non-SEZs entities has been allowed   in order to make SEZ operations more viable.
- v. Online processing of various activities relating to SEZ Developers and Units has been introduced  for improving ease of doing business

*****