SEZ

Question 1

India’s First EPZ

Answer 1

Export Processing Zone which promoted exports, Kandla 1965

Question 2

Key Criteria for establishment of SEZ

Answer 2

I invested huge gold like my life
1. Industrial Policy of the State/Country
2. Investment Cost
3. Human Resources
4. Government Policy
5. Law and Order
6. Management and service
7. Location advantages

Question 3

Objectives of the SEZ

Answer 3

1. Additional Economic Activitiy
2. Promotion of Exports of Goods and Services
3. Promotion of investments (foreign and domestic)
4. Creation of Employment opportunities
5. Avoid multiplicity of controls and clearances
6. Single Window Systems

Question 4

Origin of SEZs

Answer 4

Announced in April 2000
Functioned from November 2000 to February 2006 under the Foreign Trade Policy and fiscal incentives were made effective through other relevant statutes

Question 5

Division of SEZ

Answer 5

Processing area where the SEZ units would come up and non-processing area where the supporting infrastructure is to be created

Question 6

Administrative set up of SEZ

Answer 6

1. Board of Approval - Secretary of Department of Commerce
2. Approval Committee at the zone deals with approval of units in the SEZ. - Development commissioner
3. Approval Committee consists of development commissioner, customs authorities and representatives of state governments.
4. All post approval clearances are done by the Development Commissioner at zone level (granting importer exporter code number, change in name of company, broad banding diversitfication)

Question 7

Incentives
1. Duty Free import/Domestic Procurement of goods
2. 100% Income tax exemption on export income under Section 10AA of the Income Tax Act for first 5 years, 50% for next five and 50% of the ploughed back export profit for next five years.
3. Exemption from minimum alternate tax
4. External commercial borrowings through recognized banking channels
5. Exemption from Central Sales Tax
6. Exemption from Service Tax
7. Single Window Clearance
8. Exemption from state sales tax

Question 8

Lease vs. Sale of land in SEZ

Answer 8

Selling of land in SEZ is expressly barred. A developer can only lease a land to the entrepreneurs holding a valid letter of approval.

Question 9

Infrastructural development in non-processing area

Answer 9

As per rule 11(10) land in non-processing area may be developed by the developer himself or leased for business and social purposes to a co-developed approved by the board. Infrastructural development after the first amendment can only be leased out to co-developer.