SEZ FAQs,SEZ Facilities,SEZ Benefits

Maharashtra CM inaugrates
Nandgaon SEZ

SEZ development in 5 years, says Maha CM

A joint venture of Eldeco Infrastructure & Properties Ltd. and
Maharashtra Industrial Development Corporation (MIDC)

Faq

(A) SEZ Related Queries

What are the incentive/facilities available for SEZ units?


•	15-year graded Income Tax Holiday
•	Exemption from Excise and Customs Duties
•	Exemption from Central Sales Tax / VAT
•	Exemption from Service Tax
•	Exemption from local taxes
•	Single Window Clearance
•	100% FDI through automatic route
•	Domestic Sales on payment of applicable duty
•	External commercial borrowings by units up to $ 500 million a year allowed without any maturity restrictions
•	Freedom to bring in export proceeds without any time limit
•	Flexibility to keep 100% of export proceeds in EEFC account
•	Offshore banking unit
•	On-site custom house
•	Self-certification

What are the facilities for Domestic suppliers to Special Economic Zone?
Supplies from Domestic Tariff Area (DTA) to SEZ to be treated as physical export. DTA supplier would be entitled to :


•	Drawback/DEPB
•	CST Exemption
•	Exemption from State Levies
•	Discharge of EP if any on the suppliers
•	Income Tax benefits as applicable to physical export under section 80 HHC of the Income Tax Act.

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

What is the role of Development Commissioner?
Development Commissioner is the nodal officer for SEZs and help in resolution of problem, if any, faced by the units / developer.

Will there be a Customs House in a SEZ?
Yes. There will be an on-site Customs House.

What is the non-processing area (NPA) in a SEZ?
The NPA is the area outside the bonded area within the SEZ earmarked for residential, commercial and recreational development

Are imports and exports faster from a SEZ?
Yes. Due to procedural ease as provided in the scheme and the on-site Customs House, the turnaround time for imports and exports in a SEZ is shorter. Loading and unloading costs are cheaper due to service tax exemptions.

Routine examination of goods by customs in the EOU is common. Will the same practice continue at the SEZ?
Customs examination is to the bare minimum. SEZ units function on self certification basis.

What is the Role of State Government?
State Government will have a very important Role to play in the establishment of SEZ, representative of the state Government, who is the member of the Inter-Ministerial Committee on the Private SEZ, is consulted while considering the proposal. Before recommending any proposal to the ministry of commerce and industry (Dept of commerce) the state must satisfy themselves that they are in a position to supply basic inputs like water, electricity etc

What are the special features if we come to the SEZ zone?
The unit would be entitled for a package of incentives and a simplified operating environment.

Can foreign Company set up in SEZ?
Yes

Who is responsible for the maintenance of a SEZ?
The Developer of a SEZ is responsible for its maintenance

(B) Setting up a unit in SEZ?

What are the rules that govern the setting up of units in a SEZ in India ?
There are two documents that govern the setting up of units in a SEZ:
1. The SEZ Act of India, 2005
2. The SEZ rules 2006
These documents can be downloaded from the website www.sezindia.nic.in

Is 100 % Foreign Direct Investment allowed for setting up units in a SEZ?
Yes (except for a few prohibited list of industries eg. armaments, drugs and such sensitive items)

What is the approval mechanism for the units to be set up in a SEZ?
All approvals are to be given by the Unit Approval Committee headed by the Development Commissioner (DC). Clearance from the Department of Policy and Promotion/Board of Approvals, wherever required will be obtained by the Development Commissioner. A Letter of Approval to set up a unit in a SEZ is issued by the DC, provided the unit meets all the criteria specified in the Application. The Application form, can be downloaded from www.sezindia.nic.in
The procedure of application is detailed under Clause 17 of the SEZ Rules, 2006.

What are the obligations of the Unit under the Scheme?


•	SEZ units have to achieve positive net foreign exchange earned over five years i.e. Exports (FOB value of all exports) - Imports (CIF value of all imports) > 0. Please see Clause 53 of Chapter VI of the SEZ Rules, 2006 for a more detailed explanation
•	For this purpose, a Legal Undertaking is required to be executed by the unit with the Development Commissioner
•	Any company set up with FDI has to be incorporated under the Indian Companies Act with the Registrar of Companies for undertaking Indian operations
•	The units have to maintain proper records of accounting
•	Annual Performance Reports must be submitted to the Development Commissioner
•	The units are also to execute a bond with the zone Customs for their operations in the SEZ

Is any type of Industry permitted in SEZ?
Any type of industry can be located in a SEZ with the appropriate approvals and clearances from the Pollution Control Board. Polluting industries will be allowed to be set up only after scrutinizing the environmental impact of the industry and the safe-guard measures adopted by the units. This is entirely at the discretion of the management of ELDECO MIDC .

Can units operate both in the domestic tariff area (DTA) and SEZ area?
A company can set up units both in the SEZ and DTA, provided separate accounting procedures are maintained by the units. A unit in the DTA cannot export to itself in the SEZ.

Can SEZ units sell to the domestic market?
Yes. SEZ units can sell goods and services, including rejects and scrap or other by-products of the manufacturing process in the domestic market on payment of applicable customs and excise duties.

If one buy goods from DTA should they require to pay State Sales Tax and Excise?
NO. State has exempted the sales from DTA to SEZ from local levies and taxes

Can SEZ units do job work for domestic companies for exports?
Yes. SEZ units can do contract work for domestic companies, provided all raw material including semi-finished goods and consumables including fuel is supplied by the DTA exporter. The finished goods must be directly exported from the SEZ unit on behalf of the DTA exporter. The export document is jointly in the name of the DTA unit and the SEZ unit. The DTA exporter is eligible for refund of duty paid on the inputs by way of brand rate of duty drawback.

Can subcontracting be given to another SEZ unit within the same SEZ or in another SEZ?
Yes.

Can SEZ units subcontract part of their production process (e.g. finishing process) to units in the DTA?
Yes. SEZ units can subcontract to units in the DTA which are registered with the excise department and also abroad with prior permission of the Specified Officer given on an annual basis. The goods sent out for subcontracting have to be returned to the SEZ within 120 days from the date of removal or within a period as may be extended by the Special Officer in charge of this procedure.

Can goods be exported directly from the sub-contractor's premises in the DTA?
Yes. Goods can be exported directly from the DTA unit provided it is registered with the Central Excise Department. This is allowed only by way of direct export and not through third parties.

Are sales permitted from one unit to another in a SEZ or from one SEZ to another?
Yes. Inter Unit Sales are permitted as per the Policy. Buyer procuring from another unit pays in Foreign Exchange.

Are existing labour laws applicable in a SEZ?
All existing labour laws are applicable in a SEZ. Labour in a SEZ will be treated as a Public Utility Service.

Are Local laws applicable in a SEZ?
Yes. Local laws are applicable in a SEZ unless specifically given exemption by the State Government

What about the Licenses for Imports?
No License is required for imports, including second hand machineries.

(C) Project Related Queries

What is the size of the SEZ?
ELDECO MIDC SEZ is 2500 acre comprising processing and non processing area

Who is developing this SEZ?
ELDECO MIDC Growth City is being developed on the Build-Own- Operate- transfer (BOOT) by ELDECO MIDC SEZ LTD on Public partnership (PPP) basis.

What is the role of MIDC?
MIDC is a strategic stake holder for the project.

Where is “ ELDECO MIDC Growth City Multiproduct SEZ located”?
ELDECO MIDC Growth City Multiproduct SEZ is located on Nandgao Peth in Amravati, Maharastra. Amravati is 140 km from Nagpur , 500 km from Pune and 700 km from Mumbai

How to reach Amravati?
Amravati got the national connectivity via Surat- Nagpur- Kolkatta NH-6. One can either reach Nagpur which is 140 Km from Amravati. There are direct flight available for Nagpur from Mumbai and Delhi .

How far is the SEZ from the main city of Amravati ?
From the main city the site is 10-12 kms

What is the availability of the Power in the SEZ?
33/11KV line from Kondeswar Substation. Proposed power supply corridor from the existing 220/133 KV MSEB HT line. In addition, MIDC is planning a power SEZ near Badravathi (1000 MW) to facilitate uninterrupted power supply

Will there would be a CETP (Common Effluent Treatment Plant) provided?
Yes there would be a common CETP for all the industry.

What is the availability of the Water?
Upper Wardha dam built across Wardha river (38 km), allocated for industrial use in Amravati. There is 25 MLD water treatment plant close by.

What is the availability of logistic?
We had earmarked the logistic zone, and talking to various logistic player.

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