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    The Main Objectives of The SEZ Act Are

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    Parag Yadav
    India established its first Export Processing Zone in 1965 in an effort to promote exports. In 2000, India announced a new Special Economic Zones policy to attract more foreign investment by providing liberal economic laws, quality infrastructure, and tax incentives. This led to the passage of the Special Economic Zones Act of 2005, which established a single window clearance system and simplified procedures and regulations to promote investment, exports, employment, and infrastructure development through Special Economic Zones.

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    The Main Objectives of The SEZ Act Are

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    Parag Yadav
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    India established its first Export Processing Zone in 1965 in an effort to promote exports. In 2000, India announced a new Special Economic Zones policy to attract more foreign investment by providing liberal economic laws, quality infrastructure, and tax incentives. This led to the passage of the Special Economic Zones Act of 2005, which established a single window clearance system and simplified procedures and regulations to promote investment, exports, employment, and infrastructure development through Special Economic Zones.

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    India established its first Export Processing Zone in 1965 in an effort to promote exports. In 2000, India announced a new Special Economic Zones policy to attract more foreign investment by providing liberal economic laws, quality infrastructure, and tax incentives. This led to the passage of the Special Economic Zones Act of 2005, which established a single window clearance system and simplified procedures and regulations to promote investment, exports, employment, and infrastructure development through Special Economic Zones.

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    The Main Objectives of The SEZ Act Are

    Uploaded by

    Parag Yadav
    India established its first Export Processing Zone in 1965 in an effort to promote exports. In 2000, India announced a new Special Economic Zones policy to attract more foreign investment by providing liberal economic laws, quality infrastructure, and tax incentives. This led to the passage of the Special Economic Zones Act of 2005, which established a single window clearance system and simplified procedures and regulations to promote investment, exports, employment, and infrastructure development through Special Economic Zones.

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    India was one of the first in Asia to recognize the effectiveness of the Export Processing

    Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965.
    With a view to overcome the shortcomings experienced on account of the multiplicity of
    controls and clearances; absence of world-class infrastructure, and an unstable fiscal
    regime and with a view to attract larger foreign investments in India, the Special
    Economic Zones (SEZs) Policy was announced in April 2000.
    A Special Economic Zone (SEZ) is a geographical region that has economic laws that
    are more liberal than a country's typical economic laws.
    This policy intended to make SEZs an engine for economic growth supported by quality
    infrastructure complemented by an attractive fiscal package, both at the Centre and the
    State level, with the minimum possible regulations. SEZs in India functioned from
    1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal
    incentives were made effective through the provisions of relevant statutes.
    To instill confidence in investors and signal the Government's commitment to a stable
    SEZ policy regime and with a view to impart stability to the SEZ regime thereby
    generating greater economic activity and employment through the establishment of SEZs,
    The Special Economic Zones Act, 2005, was passed in 2005, which came in to effect on
    10th February, 2006, providing for drastic simplification of procedures and for single
    window clearance on matters relating to central as well as state governments.
    The main objectives of the SEZ Act are:
    (a) generation of additional economic activity
    (b) promotion of exports of goods and services;
    (c) promotion of investment from domestic and foreign sources;
    (d) creation of employment opportunities;
    (e) development of infrastructure facilities;

    The SEZ Act 2005 envisages key role for the State Governments in Export Promotion
    and creation of related infrastructure.

    The SEZ Rules provide for:

    • " Simplified procedures for development, operation, and maintenance of the


    Special Economic Zones and for setting up units and conducting business in
    SEZs;

    • Single window clearance for setting up of an SEZ;

    • Single window clearance for setting up a unit in a Special Economic Zone;

    • Single Window clearance on matters relating to Central as well as State


    Governments;

    • Simplified compliance procedures and documentation with an emphasis on self


    certification

    The incentives and facilities offered to the units in SEZs for attracting investments
    into the SEZs, including foreign investment include:-

    • Duty free import/domestic procurement of goods for development, operation and


    maintenance of SEZ units

    • 100% Income Tax exemption on export income for SEZ units under Section
    10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and
    50% of the ploughed back export profit for next 5 years.

    • Exemption from minimum alternate tax under section 115JB of the Income Tax
    Act.

    • External commercial borrowing by SEZ units upto US $ 500 million in a year


    without any maturity restriction through recognized banking channels.

    • Exemption from Central Sales Tax.

    • Exemption from Service Tax.

    • Single window clearance for Central and State level approvals.

    • Exemption from State sales tax and other levies as extended by the respective
    State Governments.
    The major incentives and facilities available to SEZ developers include:-

    • Exemption from customs/excise duties for development of SEZs for authorized


    operations approved by the BOA.

    • Income Tax exemption on income derived from the business of development of


    the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income
    Tax Act.

    • Exemption from minimum alternate tax under Section 115 JB of the Income Tax
    Act.

    • Exemption from dividend distribution tax under Section 115O of the Income Tax
    Act.

    • Exemption from Central Sales Tax (CST).

    • Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ
    Act).
    The SEZ Rules provides the simplification of procedures for development, operation, and
    maintenance of the Special Economic Zones and for setting up and conducting business
    in SEZs.
    The SEZ policy was first introduced in India in April 2000, as a part of the Export-Import
    (“EXIM”) policy of India.

    Important SEZs in India

    • Belgaum Aerospace SEZ Operational SEZ in Karnataka

    • Chennai One in Thoraipakkam, Chennai

    • ETA Technopark in Navalur, Chennai

    • Falta in West Bengal

    • Kensington in Powai, Mumbai

    • Mahindra World City in Chennai and Jaipur

    • MARG Swarnabhoomi in Tamil Nadu

    • MIHAN in Pune

    • SEEPZ in Mumbai

    • Greater NOIDA in Uttar Pradesh

    • Pharma and Biotech SEZ in Aurangabad, Maharashtra

    SEZs in India
    SEZ's are located in the states of Andhra Pradesh, Chandigarh, Gujarat, Haryana,
    Karnataka, Kerala, Maharashtra, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh & West
    Bengal in India. Also see the complete List of SEZs in India.
    Currently, India has more than 1022 units in operations in over 9 functional SEZs, each
    an average size of 200 acres (0.81 km2). 8 Export Processing Zones (EPZs) have been
    converted into SEZs.
    These are fully functional. All these SEZs are in various parts of the country in the
    private/joint sectors or by the State Government. But this process of planning and
    development is under question, as the states in which the SEZs have been approved are
    facing intense protests, from the farming community, accusing the government of
    forcibly snatching fertile land from them, at heavily discounted prices as against the
    prevailing prices in the commercial real estate industry. Also some reputed companies
    like Bajaj and others have commented against this policy and have suggested using
    barren and wasteland for setting up of SEZs.
    Top Cities in India with SEZ Infrastructure

    • Chennai - Chennai has been an attractive SEZ destination thanks to its prodigous
    availability in Infrastructure, highly efficient man-power & potential resources

    • Hyderabad - Hyderabad has been another cosmopolitan city that has a prominent
    quantity of SEZs and Business Chambers with plenty of recreational
    activities.Hyderabad stands second only to Chennai in terms of no. SEZs.

    • New Delhi - New Delhi along with the National Capital Region comprising
    Faridabad ,Gurgaon ,Noida ,Greater Noida & Ghzidabad is another emerging
    destination for outsourcing.

    • Coimbatore - Coimbatore is a visible and emerging destination for Information


    Technology and Economic Zones with enormous potential and manpower.

    • Pune - Pune along with Mumbai's financial support is a viable contender to the
    SEZ Capital of India.The infrastructure and resources
    In recent time SEZ is also launched in Ahmedabad in region name Changodar. available
    in Pune can one-day challenge the likes of Chennai and Hyderabad.

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