Source: TH
Context: The Government of India has relaxed key provisions of the SEZ Rules, 2006 to encourage semiconductor and electronics manufacturing.
- These changes aim to simplify land requirements, ease approvals, and enable domestic supply.
About Relaxed Key Provisions of the SEZ Rules, 2006:
- SEZs are designated zones with special economic regulations that differ from the rest of the country to attract foreign and domestic investment, promote exports, and boost manufacturing.
- Established under: Special Economic Zones Act, 2005.
- Administered by: Ministry of Commerce and Industry, Government of India.
- Governing Law: Governed by the SEZ Act, 2005 and SEZ Rules, 2006.
- Key Features of SEZ Rules, 2006:
- Minimum Land Requirement: Mandated minimum contiguous land area of 50 hectares for general SEZs and varied for sector-specific SEZs.
- Export-Oriented Units: SEZ units must primarily export their output, with net foreign exchange earnings as a key criterion.
- Single-Window Clearance: Ensures fast-track approvals and simplified compliance through a unified authority (Board of Approval).
- Tax Incentives: Income tax exemptions, customs duty waivers, and GST-related benefits for SEZ developers and units.
- Encumbrance-Free Land: Required land to be free from legal disputes or ownership issues for SEZ development.
- Separate Customs Territory: SEZs are treated as deemed foreign territory for trade operations, duties, and tariffs.
- Recent Relaxations in SEZ Rules:
- Land Requirement Eased: Minimum land size reduced from 50 hectares to 10 hectares for semiconductor/electronic component SEZs.
- Encumbrance-Free Clause Relaxed: SEZs can now be set up on land even with pending legal or administrative charges.
- Domestic Supply Permitted: SEZ units in semiconductor and electronic sectors allowed to sell within India after paying duties.
