An expert committee on the Exim Policy has proposed separate legislation on special economic zones, conversion of all export processing zones into SEZs and the renaming of units that export two-thirds of their produce as EOUs.
In its report submitted to commerce and industry minister Murasoli Maran last month, the committee headed by former commerce secretary P P Prabhu, however, said the tax sops available to existing EOUs should not be extended to units that export over two-thirds of their produce. It also said the facility of domestic tariff area (DTA) sale at a concessional rate, available to EOUs, should be progressively withdrawn.
On EPZs, the committee has said the scheme should be abolished and all remaining zones should be converted into SEZs. Units in EPZs that intend to avail of the facility of DTA sale on concessional terms should be given the option to either be part of the SEZ or move out within a reasonable period without penalty, the committee added. On SEZs, the committee said that the zones should have a comprehensive law that provides a special dispensation in areas like labour.
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The 12-member committee recommended that duty neutralisation schemes be continued during the next five-year Exim Policy that commences on April 1.
The Duty Entitlement Passbook (DEPB) scheme, which was due to be terminated from the next fiscal, should, however, be extended for another three years and then be merged with the duty drawback scheme, the committee said.
The DEPB scheme should be modified and called the Duty Drawback Credit Scheme, it said, adding that the maximum rate may be pegged at 17 per cent and value caps specified in all cases at the rate of 10 per cent and above.
The committee set up to provide the framework for the Exim Policy said the present duty neutralisation schemes should be operated in such a way that they are least susceptible to countervailing action.