Understanding Special Economic Zones in India

Posted by sunilkumar on March 24th, 2020

IT SEZs in India have proved quite successful. In the year 2012-13, IT exports to the country amounted to Rs 1.40 lakh crore, which is 70% more than the previous year. The government abolished the 10-hectare minimum area requirement for creating an IT SEZ. This exemption is even higher in grade B and C category cities. 173 SEZs are operating in the country as well. To date, 386 SEZs have received in-principle approval. In the year 2012-13, SEZ exports saw a 31% increase. However, the experts do not consider the SEZ policy to be an entirely successful policy.

SEZs are sectors that aim to accelerate the growth of tax incentives by attracting foreign dollars and technological advancement.

Process for Setting up a private Unit in the Special Economic Zone:-

For setting up a unit in SEZ, the claimant has to apply online. He has to submit the duly signed document that is filed online in Form F. 

Other required papers would be - 

• Print out of form-F having SEZ Rules printed on them.

• Duly filled every page of application along with duly signed relevant documents.

• A demand draft of 5000 INR made in favour of 'Pay and Accounts Officer, Department of Commerce, Ministry of Commerce & Industry, payable at New Delhi'.

• An Affidavit on the duly notarized Rs. 100 non-judicial stamp paper in the required format.

• Company's/Firm's PAN Card xerox.

• Comprehensive Project Report including all the essential details and information of the project. The report should include a feasibility report, promoters' information, directors bio-data, total project cost, process flow chart, means of finance, finance break up details, and the forecasted profitability statement.  

• Report on the details of the recent activities the company/firm

• A duly signed copy of M&AoA (Memorandum & Articles of Association), certificate of Incorporation (Pvt. Ltd. or Ltd. /LLP Company). The applicant should ensure that the nomenclature of submitted activities as mentioned in MOA.  

• A duly filled INC 22 form in support of registered office address. 

• Copy of Board Resolution of authorized director along with the copy of power of attorney (in case of partnership firms). 

• Residential address proof (i.e. Passport/Voter Identity card/Ration Card/Driving Licence), as well as Income Tax returns (for last three years) and PAN Card (of all partners/proprietors).  

• Along with the papers mentioned above and docs, there are several other documents required to provide. 

The proposals to set up a unit in SEZ need to place to Approval Committee. In the case of project approval, the applicant will receive a Letter of Approval. On the receipt of the Letter of Approval, the unit has to affirm the terms &conditions within the specified time. For the implementation of Letter of Approval, the unit should execute Bond & legal undertaking in the form H of SEZ Rules on a 100 Rs stamp paper notarized by Notary Public department of the same State. Before performing any action of import/export, a unit in SEZ must obtain IEC. There is a requirement of EPCES Registration-cum-Membership for availing exemptions, concessions, and drawbacks under the SEZ provisions. 

SEZ- What We Have Learned?

For Special Economic Zones to be a success in the long-term and provide benefits to the Nation, they should contribute to the structural transformation of the financial strength and economy. It includes economic upgrading and diversification. Thus, it entails leveraging dynamic economic profit privileges from employment and investment. 

Accomplishing success with SEZ affairs requires adopting a more flexible approach to use the instruments of it most practically and powerfully, to make most of the Nation's sources of comparative benefit. It will require more comprehensive policies for the enhanced scope of any SEZ program alone, such as:

• To promote Training, Knowledge sharing, and skills development

• To promote industry assemblages

• To support the alliance of the chains and collaboration of regional value and

• To support private-public institutions, both transversal and industry-specific

Conclusion:-

Special Economic Zone promotes growth, investment, and commercial opportunities, as proved by the different success stories in many counties. With different stories of achievement in the making, SEZs are something that needs to be supported and encouraged rather than opposed.