Amendments to Special Economic Zones Rules, 2006 notified

The Department of Commerce under the aegis of Ministry of Commerce and Industry notified amendments to the existing Special Economic Zones (SEZ) Rules, 2006 on 12 August 2013. These new rules will be termed as the SEZ (Amendment) Rules, 2013. The amendments are in line with the reforms announced in April 2013, during the annual supplement to the Foreign Trade Policy of 2009-2014.

Some of the key amendments introduced are as follows :

1. Minimum land area requirement for a multi product SEZ has been slashed to half from 1,000 hectares to 500 hectares. In case of single product SEZ the land area requirement was brought down from 100 hectares to 50 hectares.
2. If a SEZ is proposed to be set up in Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttaranchal, Sikkim, Jammu and Kashmir, Goa or in a Union Territory, the area shall be one hundred hectares or more. Earlier, the requirement was two hundred hectares.
3. Multi-services SEZs will be treated on a par with single-product SEZs, with the minimum area being reduced to half from 100 hectare. This will allow multi-product SEZ developers with a minimum land requirement of 500 hectare to set up multi-services SEZ on an additional 50 hectare of land.
4. SEZ developers will be able to add one product category on each additional 50 hectares of land.
5. The promoter of the SEZ will have further flexibility to set up additional units in the sector specific SEZ covered under Sectoral broad-banding. These units can be from related or similar areas of the same sector.
6. For SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology, handicrafts, the minimum area required will be 10 hectares.
7. For information technology (IT/ITeS) SEZs, till now the minimum land area requirement was 10 hectares. The modified policy has done away with minimum land area requirement for IT/ITeS SEZs but there is a minimum built up area criteria which needs to be met. If the city category is A, minimum built up area requirement stands at 1,00,000 square meters, for Category B it is 50,000 square meters while for Category C it shall be 25,000 square meters.
8. A new Annexure IV A has been introduced which classifies cities in three categories. Category A includes Greater Mumbai, Delhi NCR, Kolkata, Chennai, Bangalore, Hyderabad and Pune. Ahmedabad, Bhubneshwar, Chandigarh, Coimbatore, Indore, Jaipur, Kkochi, Lucknow, Madurai, Mangalore, Nagpur, Thiruvananthpuram, Tiruchiappali, Vadodara and Visakhapatnam fall under Category B while all other cities have been classified under Category C.
9. Any addition or upgradation to existing ports, manufacturing units or structures after their addition or inclusion in a SEZ will be eligible for fiscal incentives as applicable for a new infrastructure in a SEZ.
10. A Free Trade and Warehousing Zone may be permitted in a SEZ having area less than five hundred hectares, but subject to the condition that the maximum area of such Free Trade and Warehousing Zone shall not exceed twenty per cent of the processing area.
11. Exit norms for SEZs has been added. This allows transfer of ownership of SEZ units including sales subject to certain conditions. The unit should have been operational for a minimum period of two years and the entire duties and liabilities will have to be transferred to the acquiring entity.

Courtesy: CMIE