Special Economic Zone (SEZ)

A Special Economic Zone in short SEZ is a geographically distributed area or zones where the economic laws are more liberal as compared to other parts of the country. SEZs are proposed to be specially delineated duty free enclaves for the purpose of trade, operations, duty and tariffs. SEZs are self-contained and integrated having their own infrastructure and support services.

Within SEZs, units may be set-up for the manufacture of goods, provisioning of services, and other activities including processing, assembling, trading, repairing, reconditioning, making of gold/silver, platinum jeweler etc. The area under 'SEZ' covers a broad range of zone types, including Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Trade Zones (FTZ), Free Ports, Urban Enterprise Zones and others. Usually the goal of an SEZ structure is to increase foreign investment.

In Indian, at present there are eight functional
Special Economic Zones located at Santa Cruz (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Nodia (Uttar Pradesh) in India. Further a Special Economic Zone at Indore ( Madhya Pradesh ) is also ready for operation. In addition 18 approvals have been given for setting up of SEZ at Positra (Gujarat), Navi Mumbai and Kopata (Maharashtra), Nanguneri (Tamil Nadu), Kulpi and Salt Lake (West Bengal), Paradeep and Gopalpur (Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida (U.P.), Vishakhapatnam and Kakinada (Andhra Pradesh), Vallarpadam/Puthuvypeen (Kerala) Hassan ( Karnataka), Jaipur and Jodhpur ( Rajasthan) on the basis of proposals received from the State Governments.

Basic Requirements for SEZ

A SEZ may be set-up in the public, private, or joint sector and /or by a state government and even by a foreign country. The minimum land area requirement for establishing a SEZ is 1000 hectares. Out of this total area, only 30-35% of area is used for setting up plants and rest of the area is used to provide housing facilities, malls, multiplexes etc

Documents Required

For SEZ, application can be send to the Chief Secretary of the state containing following particulars:

• Location of the proposed zone with details of existing infrastructure and that proposed to be established.
• Its area, distance from the nearest sea port / airport / rail / road head etc.
• Financial details, including investment proposed mode of financing
  and viability of the project.
• Details of foreign equity and repatriation of dividends etc., if any
• Whether the zone will allow only certain specific industries or will be a multi-product zone.

Once the entire necessary document is submitted, the State Government forwards it to the Department of Commerce, Government of India.

Facilities to SEZ Developer

• Complete 100% FDI allowed for townships with residential, educational and recreational facilities on a case to case basis and franchise for basic telephone service in SEZ.
• Income tax benefit under (80 IA) to developers for any block of 10 years in 15 years.
• Duty free import/domestic procurement of goods for development, operation and maintenance of SEZs.
• Exemption from service tax /CST.
• Income of infrastructure capital fund/co. from investment in SEZ exempt from Income Tax.
• Investment made by individuals etc in a SEZ co also eligible for exemption u/s 88 of IT Act.
• Developer permitted to transfer infrastructure facility for operation and maintenance.
• Generation, transmission and distribution of power in SEZs allowed.
• Full freedom in allocation of space and built up area to approved SEZ units on commercial basis.
• Authorized to provide and maintain service like water, electricity,
  security, restaurants and recreation centers on commercial lines.

Monitoring Authorities

Performance of the SEZ units monitored by a Unit Approval Committee consisting of Development Commissioner, Custom and representative of State Govt. on annual basis.