Draft SEZ bill ready, govt may table in Winter Session, say sources
Informist, Wednesday, Jun 19, 2024
By Krity Ambey
NEW DELHI - The commerce ministry is ready with a draft bill to amend the Special Economic Zones Act and may introduce it in the Winter Session of Parliament, two government officials said. The government plans to bring the bill in the Winter Session as there is already a lot of business, including the Budget, lined up for the upcoming Monsoon Session.
The government has decided to scrap the Development of Enterprise and Service Hubs Bill that was initially envisaged to replace the SEZ Act, they said. The government will not repeal the SEZ Act now, instead it will make amendments to the existing one, one of the officials said. In the Budget for 2022-23 (Apr-Mar), Finance Minister Nirmala Sitharaman had announced that the government will introduce a new bill to replace the SEZ Act.
The preparation for the SEZ bill is part of the commerce department's 100-day agenda, the first of the two officials told Informist. The department will also hold consultations on the bill with the finance ministry and NITI Aayog in the coming months, the official added.
"The main aim (of the bill) is to make provisions so that exporters in SEZs could also sell in DTA (domestic tariff area)," the official said. "There will also be some tax tweaks for SEZs, the revenue department will finalise that," the second official said.
India had enacted the Special Economic Zones Act in 2005 to boost exports. The units in such zones manufacture primarily for export markets. These exporters get several tax incentives, including duty-free import of goods for development, operation and maintenance of the SEZ units.
The SEZ units are allowed to sell in the domestic tariff area after payment of duties on the finished product. "There is a slight arbitrage here as such sellers have not paid duty on the raw material, the (SEZ) bill will fix that also," the second official said.
Last year, the commerce ministry had prepared the Development of Enterprise and Service Hubs Bill or DESH Bill, but the finance ministry rejected the proposals. "There were some tax incentives proposed in the DESH bill that the finance ministry rejected," the second official said.
There are 375 special economic zones in the country with a total investment of 6.93 trln rupees, according to the latest data from the commerce ministry. The units in the special economic zones exported goods worth $163.69 bln in the last financial year ended March, accounting for 37.5% of India's total merchandise exports. End
