SEZ bill introduced in Lok Sabha

The long-awaited special economic zone (SEZ) bill, providing fiscal packages including 15-year tax holidays and single window clearances for units in the zone, was introduced in the Lok Sabha today.

The umbrella legislation, which was cleared by the union cabinet last week, provides for fiscal regimes for both developers and units in the zones besides a legislative framework for setting up offshore banking units (OBUs).

The 56-page SEZ bill seeks to establish a single enforcement agency to ensure speedy trial and investigation of notified offences committed in such zones.

As per the provisions of the bill, SEZ units will be eligible for 100%tax exemption for five years, 50% for the next five years and 50% of the ploughed back export profits for the next five years. The developers of the zones will continue to get 100% income tax exemption for 10 years in a block period of 15 years.

The bill encourages state governments to liberalise state laws and delegate powers to the development commissioners of SEZs to facilitate single window clearance.

India has 11 functioning SEZs. Of these, seven have been set up by the central government and four in the private/joint/state sector. In addition, approvals have been given for 35 new SEZs in private/state sectors.

The 11 functioning SEZs are situated in Kandla, Surat, Kochi,
Santa Cruz, Falta, Chennai, Vishakhapatnam, Noida, Indore,
Salt Lake (Kolkata) and Jaipur. Two more at Jodhpur and
Moradabad are ready for operations.