Special Economic Zones in India

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Special Economic Zones in India - Presentation Transcript

  1. SEZs IN INDIA http://financexchange.blogspot.com
  2. Structure
    • Part I: Evolution and Framework
    • Part II: Policy Features
    • Part III: Development Process
    • Part IV: Project Risks
    • Part V: Conclusions
  3. INDIANNESS of SEZ
    • PVT SECTOR DRIVEN
    • HYBRID OF CHINESE SEZ AND EPZ
    • KEY ROLE OF STATE GOVTS.
    • UNIQUE FISCAL REGIME:BY LAW
    • REGULATORY REGIME
    • EFFECTIVE AND EFFICIENT REGULATORY REGIME: SINGLE ENFORCEMENT AGENCY
  4. SEZ Features (Cont’d)
    • SINGLE COURT
    • LEGALFRAMEWORK: WINDOWS IN EXISTING LAWS LEADING TO STATE & CENTRAL ACTS
    • SEZ REFORMS DRIVEN BY ECONOMIC NEED & LOGIC
    • POLITICAL ENVIRONMENT
  5. SEZ POLICY
    • EVOLVED OVER LAST THREE YEARS
    • GOI AND RESPECTIVE STATES(12)
    • CENTRAL SEZ ACT READY
    • SIX STATES HAVE ENACTED STATE SEZ ACTs
  6. SEZ POLICY FRAMEWORK
    • Income Exemption
    • DDT/CG/MATCST/SERVICE TAX
    • STATE TAXES
    • No license required for import.
    • Manufacturing, trading and services allowed.
    • Freedom to subcontract
  7. SEZ Policy Cont’d
    • Single window approval by DC
    • No License required to manufacture items reserved for SSI sector.
    • 100% FDI allowed in manufacturing through automatic route except in a few sectors.
    • No cap on foreign investments items reserved for SSI.
  8. SEZ Policy Cont’d
    • Guidelines issued by RBI in Nov 2002 for setting up Off-shore Banking Units in SEZs.
    • External commercial borrowings by units allowed without any maturity restrictions.
    • Freedom to bring in export proceeds without any time limit
  9. SEZ Policy Cont’d
    • 100% of export proceeds in EEFC account.
    • Freedom to make overseas investment from it.
    • Insurance outside India allowed
    • Capitalization of imports payable.
    • Commodity hedging permitted.
  10. SEZ Policy Cont’d
    • Foreign companies permitted to set up branches for manufacturing activities
    • Exemption from interest rate surcharge on export finance.
    • SEZ allowed to write off unrealised export bills.
  11. Customs and Excise
    • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units.
    • Exemption to sales made from Domestic Tariff Area to SEZ units.
  12. Income and Service Tax
    • 100% IT exemption (10A) for first 5 years,
    • 50% for 5 years thereafter and
    • 50% of reinvestment for 10 years
    • Exemption from DDT, & MAT
    • Permitted to carry forward losses
    • OBUs allowed to have full IT exemption for 5 years and 80% thereafter
    • Exemption from Service Tax to SEZ units.
  13. Environment
    • Permitted facilities like golf courses, desalination plants, hotels and non-polluting service industries in the Coastal Regulation Zone area
    • Exemption from public hearing under Environment Impact Assessment Notification
  14. Drugs and Cosmetics
    • Exemption from port restriction under Drugs & Cosmetics Rules
    • Single window mechanism in Zones having such units
  15. Companies Act
    • Office of Registrar of Companies in SEZs.
    • Exemption from requirement of domicile India for 12 months prior to appointment as Director.
    • Enhanced limit of Rs. 2.4 crores per annum allowed for managerial remuneration
  16. Domestic Tariff Area (DTA) supplier
    • Entitled to: Drawback/DEPB
    • CST Exemption
    • Exemption from State levies
    • Discharge of its EP
    • IT exemption u/s 80HHC
  17. Development Process
    • LAND ACQUISITION
    • MIN AREA
    • MODULAR APPROACH
    • INFRA/ ON SITE DEVELOPMENT
    • EXTERNAL INFRA LINKAGES
    • CO-DEVELOPERS
  18. Other Critical Policies
    • CUSTOMS
    • LABOUR
    • ENVIRONMENT
    • POWER
    • FOREIGN EXCHANGE CONTROL
    • FOREIGN INVESTMENT
    • LICENSING
  19. Project Risks
    • LOCATION
    • LAND ACQUISITION
    • REGULATORY REGIME-EFFECTIVENESS
    • STABILITY OF POLICY
    • FINANCIAL CLOSURE
  20. Thank You http://financexchange.blogspot.com

+ Personal FinancePersonal Finance, 3 years ago

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SEZs in India: A perspective

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