SEZ Rules 2006

The main provisions of the Indian SEZ Rules 2006 can be summarized as promotion of industrialization and economic growth through sustainable development of Indian industries. The main essence of the Indian SEZ Rules 2006, states that these Special Economic Zones of India shall be offered tax rebates, fiscal incentives and lands at subsidized rates. The implementation of the first drafted Special Economic Zone policy took place from the end of the year 2000 and the subsequent years witnessed a paradigm development and amendment of the basic Special Economic Zone Rules of India. The first draft of Special Economic Zone Rule for the development of Special Economic Zones in India was drafted as a five-year project, starting from 1.11.2000 to 09.02.2006. Further, the first draft of Special Economic Zone Rule of India was amended to accommodate and compliment the economic growth attained by India.

The basic provisions of the SEZ Rules 2006 can be summarized as follows -

Creation of additional economic activity across all such designated zones
Promotion of exports of goods and services across all such designated zones
Promotion of investment from domestic and foreign sources
Creation of employment at competitive rate
Development of infrastructure facilities to compliment the growth of SEZ units
Promulgation of simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business
Single window clearance booth for setting up of a SEZ and within all such Special Economic Zone unit
Single window clearance on matters relating to Central as well as State Governments approval and certification process
Facilitation of easy and simplified compliance procedures and documentations with stress on self certification process

Some of the key provisions of the Indian SEZ Rules 2006 are mentioned as below -

Should be exempted from duties on all imports for project development
Should be exempted from excise / VAT on domestic sourcing of capital goods for project development
Should be offered 10-year tax holiday in a block of the first 20 years
No foreign ownership restrictions in developing zone infrastructure and no restrictions on repatriation
Freedom to develop township in to the SEZ with residential areas, markets, play grounds, clubs and recreation centers without any restrictions on foreign ownership
Should be exempted from taxation on business income
Should be exempted from import duty, VAT and other taxes
10% FDI allowed through the automatic route for all manufacturing activities
Procedural ease and efficiency for speedy approvals, clearances and customs procedures and dispute resolution
Simplification of procedures and self-certification in the labor acts
Artificial harbor and handling bulk containers made operational through out the year
To be equipped with air ports for easy transit of men and goods
To be equipped with host of Public and Private Bank chains to offer financial assistance for business houses
Should be a vibrant industrial city with abundant supply of skilled manpower, covering the entire spectrum of industrial and business expertise
Should be well connected with network of public transport, local railways and cabs
To encourage pollution free environment with proper drainage and sewage system
To house in-house customs clearance facilities
Should have easy access to airport and local railway station
Full authority to provide services such as water, electricity, security, restaurants and recreational facilities within the zone on purely commercial basis
Should have abundant supply of technically skilled manpower
Should have abundant supply of semi-skilled labor across all industry sectors

Last Updated on May 29, 2015