SEZ Related Consultancy Services
If you are looking to avail the advantage of setting up business in SEZ, but are not aware of the all legal formalities or the procedures involved, then you need to contact the experts i.e. Rajput Jain & Associates. We are considered amongst the reputed SEZ Registration Consultants in India. Our excellent Services for SEZ can be availed by all kinds of companies. To ensure a speedy and annoying free Special Economic Zone Registration, we are your best bet. If you are on the edge of establishing a new business, then why not settle for SEZ? The following points will provide you an insight into the advantages of SEZs and all other important information regarding them. To specifically know about how all this applies to your business, feel free to contact our team anytime.
In order to give a long term and steady policy framework with minimum regulatory command and to provide prompt and single window clearance mechanism, the Special Economic Zones Act, 2005 has been brought into effect along with the Special Economic Zones Rules, 2006 from 10 February 2006.
The Act and the Rules together aim to provide a single self contained legislation governing the operations of SEZs and changes the hitherto applicable legislations and rules governing the processes of SEZ in India.
Under the Act, Special Economic Zone could be set up either jointly or severally by the Central Government, State Government, or any person (including a private or public limited company, partnership or proprietorship) for the following purposes:
- Manufacture of goods; or
- Services to be rendered; or
- Both manufacturing of goods and for rendering of services; or
- As a Free Trade and Warehousing Sector.
The key role is envisaged by the SEZ Act 2005 for the State Governments in Export Promotion and creation of related infrastructure. A Single Window SEZ approval mechanism has been provided through a 19 member interministerial SEZ Board of Approval (BoA). The applications duly suggested by the respective State Governments/UT Administration are considered by this BoA from time to time. All decisions of the Board of approvals are with consensus.
PERFORMANCE : These SEZ policy provides for setting of SEZ's in the public, private joint sector or by State Govts. It was also imagined that some of the existing Export Processing Zones would be converted into SEZs. Accordingly, Export Processing Zones located at Kandla and Surat (Gujarat), Cochin (Kerala), Santa Cruz ( Mumbai-Maharashtra), Falta ( West Bengal) , Madras( Tamil Nadu), Vishakhapatnam (Andhra Pradesh) and Noida (Uttar Pradesh) has been converted by the Government of India into SEZ.
In addition, approval for setting up of 42 SEZs has been given in various parts of the country in private/joint sectors or by the State Govt. Besides these, 3 new additional SEZs are approved for establishment at Indore (Madhya Pradesh), Manikanchan- Salt Lake (Kolkata) and Jaipur have since commended operations.
As on 31st March 2005, there are 811 units in operation in the 8 functional SEZs. Investment by the units in these Zones are of the order of Rs 18309 million. Employment to about 100650 persons are being provided by the SEZ units out of which 32185 are females.
Different minimum land requirement for different class of SEZs are being provided by the SEZ Rules. Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.
CRITERIA FOR APPROVAL: Proposals for setting up SEZ in the Public/Private/Joint/State sector are required to meet the following conditions:
- Size of SEZ should be minimum of 1000 hectares. However, is would not apply to existing EPZs converting into SEZs as such or for notifying additional area as a part of such SEZ or to product specific port/airport based SEZs.
- The SEZ and units therein shall abide by local laws, rules, regulations or bye-laws in regard to area planning, sewerage disposal, pollution control and the like. They shall also comply with industrial with industrial and labour laws and such other laws /rules and regulations as may be locally applicable.
- Such SEZ shall make sufficient arrangements to fulfill all the requirements of laws, rules and procedures applicable to such SEZ.
- Only units approved under the SEZ schemes would be permitted to be located in these SEZ.
- At least 25% area of the SEZ shall be used for developing industrial area for setting up such units.
THE SEZ RULES PROVIDE FOR:
- Simplified procedures for development, process, and maintenance of the Special Economic Zones and for setting up units and directing 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 a focus on self certification
Proposal is submitted by the developers to the concerned State Government for establishment of SEZ. The State Government has to forward the proposal with its recommendation within 45 days from the date of receipt of such proposal to the Board of Approval. The applicant also has the option to submit the proposal directly to the Board of Approval.
The Central Government has constituted the Board of Approval in exercising of the powers conferred under the SEZ Act. All the decisions are taken in the Board of Approval by consensus. The Board of Approval has 19 Members.
SETTING UP OF SEZ BY DEVELOPER : Setting up of SEZ in the Public, Private, Joint Sector or by the State Govt. : With a view to enhance infrastructure facilities for export production it has been decided to permit the setting up of Special Economic Zones (SEZs) in the public, private, joint sector or by the State Govt. Size of SEZ should be minimum of 1000 hectares. Minimum area requirement shall, however, not be applicable to product specific and port/airport based SEZ. This measure is expected to promote self-contained areas supported by world-class infrastructure oriented towards export production. Any private /public/joint sector or State Govt. or its agencies can set up Special Economic Zone (SEZ)
SETTING UP OF SEZ ENTERPRISE : Facilities in Special Economic Zone Services rendered by us to public and private businesses and to individuals as well include: A new Special Economic Zone (SEZ) scheme has been introduced in the Export and Import policy from 1st April 2000, with a view to provide an internationally competitive & hassle free surrounding for export production.
APPROVAL OF NEW UNITS : Proposals for setting up units under EOU/SEZ scheme under automatic route shall be considered by the Unit Approval Committee taking into account the following :-
- Residence proof in respect of individual/partnership firms of all Directors/ Partners. (Passport/ ration card/ driving licence /voter identity card or any other proof to the satisfaction of Development Commissioner;
- Income Tax return of all the promoters for the last three years;
- Promoters experience,
- Marketing tie-ups
- In case of EOUs, inspection of the project site by an officer
- A report from other DCs as to whether any case under SEZ/EOU Schemes in regard to diversion of goods etc. is pending.
If it is necessary, the above may be certified through personal interview with the promoters of the project. The procedure of personal interview may be dispensed with in the event of the promoters being a well-established entity
The Unit Approval Committee shall meet on Monday, every week. In case of the absence of the Development Commissioner, the meeting will be held by the next senior officer in the Zone. The unit shall intimate the problems being faced by them in advance. In the meetings, apart from the promoters, the other concerned agency with which difficulties are being faced by the unit may also be called.
If the unit has ingots making facility and proposal to achieve value addition, then only the Recycling of ferrous and non-ferrous metal proposal will be considered
ADMINISTRATIVE SET UP
The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.
Once an SEZ has been approved by the Board of Approval and Central Government has notified the area of the SEZ, units are allowed to be set up in the SEZ. Approval Committee consisting of Development Commissioner, Customs Authorities and representatives of State Government have approved all the proposals for setting up of units in the SEZ at the Zone level. All post approval clearances including grant of importer exporter code number, change in the name of the company or implementing agency, broad banding diversification, etc. are given at the Zone level by the Development Commissioner. The performance of the SEZ units are monitored from time to time by the Approval Committee and units are liable for penal action under the provision of Foreign Trade (Development and Regulation) Act, in case of violation of the conditions of the approval.
INCENTIVES AND FACILITIES OFFERED TO THE SEZS: 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.
- Exemption from custom duty on import of capital goods, raw materials, consumable spares etc.
- Supplies from DTA to SEZ units treated as deemed exports.
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. Exemption from Central Excise duty on procurement of Capital goods, raw materials, consumables spares etc. from the domestic market.
- 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.
- 100% income tax exemption for a block period of 5 years, 50% tax exemption for next five years u/s 10AA of the Income Tax Act.
- Carry forwarded of losses.
- 100% income tax exemption for 5 consecutive years & 50% for 5 years under section 80LA of the income tax Act for off shore banking units
- 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).
- Reimbursement of Central Sales Tax paid on Domestic purchases.
- Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
- Exemption from Capital Gains - Capital gains arising on transfer of assets (machinery, plant, building, land or any rights in buildings or land) on shifting of the industrial undertaking from an urban area to any SEZ would be exempt from capital gains tax.
- ENVIRONMENT PROTECTION ACT : Information Technology SEZ does not require environment clearance for development of SEZ. Public hearing is not exempted process of Environment impact assessment (EIA) as laid in the notification of the ministry of Environment would have to be adhered to.
- COMPANIES ACT : Enhanced limit of Rs. 2.4 crores p.a. allowed for managerial remuneration. Exemption from requirement of domicile in India for 12 months prior to appointment as Director.
- EMPLOYEES PROVIDENT FUND : As per the Ministry of Labour, the state government may apply for exemption to the Central Government under section 16(2) of the Employees Provident Fund & Miscellaneous Provision Act 1952 from the applicability of the provision of the said Act for 5 years.
- DRUGS & COSMETICS ACT : Exemption from Port Restriction under Drug & Cosmetics Rules.
OTHER SEZ - FEATURES AND FACILITIES
- A designated duty free enclave and to be treated as foreign territory for trade operations and duties and tariffs.
- No License required for import.
- Reimbursement of duty paid on furnace oil, procured from domestic oil companies to SEZ units as per the rate of drawback notified by the Directorate General of Foreign Trade.
- SEZ units may be for manufacturing, trading or service activity.
- SEZ unit to be positive net foreign net exchange earner within three years.
- Performance of the unit to be monitored by a committee headed by Development Commissioner and consisting of Customs.
- 100% foreign direct investment in Manufacturing, sector allowed through automatic route barring a few sectors.
- Facility to retain 100% foreign exchange receipts in EEFC a/c
- Facility to realize and repatriate export proceeds within 12 months
- Re-export imported goods found defective, goods imported from foreign supplier on loan basis etc. without G.R. Waiver under intimation to the Development Commissioner
- "Write off "of unrealized export bills up to 5%
- Permission for Commodity hedging by SEZ units
- Capitalisation of import payables.
- For SSI reserved items no Cap on foreign investment
- Exemption from industrial licensing requirement for items reserved for SSI sectors
- Profits allowed to be repatriated freely without any dividend balancing requirement
TERMS AND CONDITIONS
- SEZ units have to be a Positive Net Foreign Exchange Earner.
- Performance of the unit will be monitored by a committee consisting of Development Commissioner of the Zone and Customs.
- Units shall maintain proper accounts and furnish details regarding value of import, export etc. to Development Commissioner on a quarterly basis
What Rajput Jain & Associates Offers
We provide complete solutions to deal with the problems relating to Special Economic Zones. Our Special Economic Zone Consultancy gives expert assistance in all related matters to develop a business in such a zone. It ranges from registration formalities, development of a business in a SEZ, compliance with government regulations, provision of funding and, so on. We take care to properly guide the clients in setting up their establishments in a SEZ minus the hassles. Our experts ensure to provide step-by-step solutions for the needs of clients belonging to different sectors by providing finance as we have associations with the leading banks. Here our expertise lies in providing solutions for service areas related to assistance in Here, our dedicated team support ensures competitive and comprehensive service support is made available to the customers. We offer below mention services in this regard.
- Approval of SEZ (Settling application before BOA, preparation of project report, facts sheet in case of conversion etc.)
- Approval of letter of permission (LOP) / renewal of letter of permission
- Approval of green card
- Approval of Import Export Code Number
- Permission for inter-unit transfer of capital goods
- Permission for disposal of waste and scrap
- Approval for enhancement of production capacity
- Permission for additional location / change of location
- Permission for sale of rejects
- DTA procurement documentation,
- Permission for sale of DTA sale
- Assisting in claiming Duty Drawback
- Assisting in claiming DEPB
- NOC for de bonding of materials
- NOC for de bonding of premises
- Structuring of contracts/transactions to optimize indirect tax incidence
- Formulating indirect tax efficient business models
- Conducting VAT impact assessment studies
- Undertaking comprehensive reviews of business operations
- Advice on classification, valuation, applicability of taxes on transactions and admissibility to tax benefits/exemptions
- Identification of innovative tax planning opportunities
- Preparations of customized compliance manuals on all taxes
- Single point contact & centralized coordination for tax payments, filing of returns
- compilation of documents
- Import procurement documentation,
- Registers & records maintenance
- Preparation of monthly returns,
- Consumption records on half yearly basis.
- Helps in obtaining job work permissions
LITIGATION SUPPORT AND REPRESENTATIONS
- Drafting of appeals & submissions
- Appearances & arguments before adjudication & appellate authorities
- Briefing Senior Counsel on need basis
- Representation before important authorities of Government on tax & trade policy issues
- Developing economic justification for tariff/non-tariff concessions.