EGoM to take up SEZ size soon

The commerce and industry ministry is expected to table this proposal at the next meeting of the empowered group of ministers on SEZs.

"There is no final view yet on whether there is also a need to have a built-up area for gems and jewellery SEZs. The gems and jewellery export promotion council has recommended only an area limit," a government official said.

Officials added that an employment generation clause for gems and jewellery SEZs was unlikely as the sector was labour intensive.

Bio-technology and non-conventional energy SEZs are likely to have an area restriction of six hectares and a built-up area of 400,000 sq m. This proposal has been accepted by the Minister for Science and Technology Kapil Sibal.

Finalisation of norms for bio-tech SEZs would help Biocon, which had recently set up a SEZ near Bangalore. The government has so far received only one proposal for setting up of a non-conventional energy SEZ.

Officials said the next meeting of the ministerial group was likely to be on May 23, failing which it would be held in the first week of June. The board of approval, the inter-ministerial body for approving SEZ is expected to meet after this.

Following the last meeting of the ministerial group on May 10, it was decided that Section 10AA of the Income- Tax Act would be amended retrospectively to provide that tax benefits to units would be available only if they were not formed by transfer of machinery or plant previously used in the domestic tariff area to the new unit in the SEZ.

However, second-hand machinery imported into India would be treated as new machinery. Officials said the definition of services for tax benefits under Section 10AA would exclude trading other than international warehousing facilities for re-exporting imported goods.

Duty-free materials would be allowed for the development of infrastructure, both in processing and non-processing areas for initial setting up, but would not be allowed for operation and maintenance of infrastructure facilities like hotels, residences and entertainment facilities.