SPECIAL ECONOMIC ZONE

Presented By : Vivek Boddul Boddul. . Unnati Joglekar. Joglekar. Ashutosh Pandey.

History
The world first known instance of SEZ have been found in an industrial park set up in Puerto Rico in 1947. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the SEZs gain global currency with its largest SEZ being the metropolis of Shenzhen. From 1965 onwards, India experimented with the concept of such units in the form of Export Processing Zones (EPZ). But a revolution came in 2000, when Murlisone Maran, then Commerce Minister, made a tour to the southern provinces of China. After returning from the visit, he incorporated the SEZs into the Exim Policy of India. Five year later, SEZ Act (2005) was also introduced.Only units approved under SEZ scheme would be permitted to be located in SEZ.

SEZ : Introduction
A Special Economic Zone in short SEZ is a geographically bound zones where the economic laws in matters related to export and import are more broadminded and liberal as compared to rest parts of the country. SEZs are projected as duty free area for the purpose of trade, operations, duty and tariffs. SEZ units are self-contained and integrated having their own infrastructure and services. SEZ units may be set-up for the manufacture of goods and other activities including processing, assembling, trading, repairing, reconditioning, making of gold/silver, platinum jewellery etc. and support services. SEZ units are deemed to be outside customs territory of India

Objectives
Generation of additional economic activity. Promotion of exports of goods and services. Promotion of investment from domestic and foreign sources. Creation of employment opportunities. Development of infrastructure facilities.

Incentive/Facilities to SEZ Developer

Exemption from Service Tax/CST. 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 services like water, electricity, security, restaurants and recreation centers on commercial lines. 100% FDI allowed for : (a) Townships with residential, educational and recreational facilities on a case to case basis, (b) franchise for basic telephone service in SEZ. Income tax holiday for 15 years (a) 100% for the first 5 years (b) 50% for the next 5 years (c) 50% of the ploughed back export profit for next 5 years.

Who can set up SEZs? Can foreign companies set up SEZs?

Any private/public/joint sector or state government or its agencies can set up an SEZ. Yes, a foreign agency can set up SEZs in India. Followings are the SEZ Unit in India : SEEPZ, Kandla, Cochin, Chennai, Vizag & Noida

Advantages through SEZs.

Advantages Infrastructure will be developed. New roads and facilities are provided around SEZs No licence required for import made under SEZ units. Exemption on excise duty, CST, service tax, custom duty. Duty free import or domestic procurement of goods for setting up of the SEZ units. Exports can be increased which ultimately lead to economies growth.

Disadvantages through SEZs.

As India is an agricultural country, Sometimes agricultural land of farmers utilized for development of SEZ Unit Revenue losses because of the various tax exemptions and incentives. Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.

Set up of SEZ unit

Functioning of SEZs is governed by a three-tier administrative set-up. Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Development Commissioner.

Figure 1: Approval mechanism for the establishment of an SEZ for a private developer

Figure 2: Approval mechanism for the establishment of an SEZ for the central and state government as a developer

Actual working for SEZ customer

Here material is moving in Sez unit

CST Nil against I Form Excise Duty Nil against ARE 1 Form

Thank You !