SEZ Rules Amendments
MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce)
New Delhi, the19th September, 2018 G.S.R. 909(E).—
In exercise of the powers conferred by section 55 of the Special Economic Zones Act, 2005 (28 of 2005), the Central Government hereby makes the following rules further to amend the Special Economic Zones Rules, 2006, namely:-
1. Short title and commencement.—(1) These rules may be called the Special Economic Zones (Amendment) Rules, 2018.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Special Economic Zones Rules, 2006 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1), clauses (k) and (l) shall be omitted.
3. In the said rules, in rule 3, after the words “State government’s recommendation”, the following words shall be inserted, namely:-
“, recommendation for National Security Clearance as per guidelines issued by the Ministry of Home Affairs”.
4. In the said rules, in rule 4, for the word “along”, the words “through the jurisdictional Development Commissioner concerned along” shall be substituted.
5. In the said rules, in rule 5, -
(i) in sub-rule (2), in clause (b), in sub-clause (ii), after the words “for setting up a Special Economic Zone for Information Technology or Information Technology Enabled Services”, the words “Bio-technology and Health Sector (excluding hospitals),” shall be inserted;
(ii) in sub-rule (5), in clause (a), after the words “State and local taxes”, the words “State Goods and Services Tax,” shall be inserted.
6. In the said rules, in rule 11, -
(i) in sub-rule (2), in the first proviso, for the words “Board”, the words “Approval Committee” shall be substituted;
(ii) after sub-rule (9), the following sub-rule shall be inserted, namely: - “(9A) The Developer shall ensure sufficient and adequate space, as per the applicable Central Public Works Department norms, for the Office of Development Commissioner and Customs Officers posted in the Special Economic Zone.”.
7. In the said rules, in rule 11A, in clause (1), -
(i) for the words “Service Tax”, the words “Central Goods and Services Tax, Integrated Goods and Services Tax and State Goods and Services Tax” shall be substituted;
(ii) in sub- clause (b), after the words “stamp duty”, the
8. In the said rules, in rule 12, -
(i) in sub-rule (6), after the words “utilization of goods”, the words “and services” shall be inserted;
(ii) in sub-rule (7) for the words “goods from an Independent Chartered Engineer” the words “goods and services from an Independent Chartered Engineer or Independent Chartered Accountant or Cost Accountant as the case may be” shall be substituted.
9. In the said rules, in rule 17, in sub-rule (1),-
(i) the words “in five copies” shall be omitted;
(ii) for clause (k), the following clause shall be substituted, namely:-
“(k) Goods and Services Tax registration certificate;”
10. In the said rules, in rule 18,-
(i) in sub- rule (2), in clause (i), for the words and figures “as provided in rule 53”, the words and figures “, value addition earning requirement, as the case may be, as provided in rule 53” shall be substituted;
(ii) in sub-rule (3),-
(A) for clause (a), the following clause shall be substituted, namely:-
“(a) export of the goods from Special Economic Zones shall be subject to export policy in force, as provided in Schedule 2 to the Indian Trade Classification (Harmonised System) of Export and Import Items, 2017;”;
(B) for clause (b), the following clause, shall be substituted, namely:-
“(b) for Gems and Jewellery, the minimum Value Addition earning requirement shall be as specified in the prevailing Foreign Trade Policy or Handbook of Procedures, as amended from time to time.”;
(iii) after sub-rule (4), the following shall be inserted, namely:-
“(4A) for existing plastic or used clothing Units in Special Economic Zones:-
(a) Broad banding and splitting of license for setting up of sub-Units shall not be allowed and all transactions of a Unit shall be regulated through a single bank account;
(b) no third party exports shall be allowed by any such Unit;
(c) all such Units shall set up facilities to make products out of used clothing or plastic waste;
(d) 100 per cent. inspection of the consignment of used clothing sale to Domestic Tariff Area shall be under taken.
(4B) Procedure to be followed for verification of documents prior to clearing the consignment in Special Economic Zone :-
(a) Each consignment of used clothing imported by the Unit shall be accompanied with certificate from exporter or agency in which it was generated regarding dis-infection and fumigation of the containers from an agency licensed in the country of origin of worn clothing along with import documents;
(b) in case of mis-declaration by any importer in regard to any toxic or hazardous substances, action as per the relevant provisions of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) shall be taken against such importer;
(c) to ensure that used clothing re-processing Units in Special Economic Zones fulfil their export obligations in addition to meeting their Net Foreign Exchange obligation and all such Units shall be required to ensure that certain minimum percentage of the Units annual turnover is physically exported out of the country;
(d) before the clearance of used clothes to Domestic Tariff Area, all imported consignments of such used clothes shall be subject to 100 per cent. scrutiny at the premises of the Unit by Special Economic Zone authorities.”.
11. In the said rules, in rule 19, in sub-rule (2), -
(a) after the words “shall specify the items of manufacture”, the words “along with the corresponding Indian Trade Classification (Harmonised System) of Export and Import Items, 2017” shall be inserted;
(b) after the third proviso, the following proviso shall be inserted, namely:-
“Provided also that the Approval Committee may also approve proposals for merger of Letters of Approval of two or more Units of the same company or firm subject to the condition that these Units fall within the same Special Economic Zone and after merger, block period for calculation of Net Foreign Exchange shall be from the date of commencement of production of the Unit which commenced operation first and the Income tax exemption period shall be considered from the date of start of operation of the first Unit.”;
(c) after sub-rule (6), the following shall be inserted, namely: -
“(6A)(1) The Units which intend to renew the validity of Letter of Approval shall submit, before two months from the date of expiry of the Letter of Approval, the completed application in form F1 along with requisite document, to the Development Commissioner, duly signed by the proprietor or managing partner or if it is a company, by the Managing Director or the Director(s) or any person who has or have been duly authorised for this purpose by a resolution of the Board of Approval of Directors of the Company:
Provided that in case an application is not submitted before the said period of two months, such application shall be placed before the Approval Committee and the said Committee, if it is satisfied that there was sufficient cause for not filling the same before the said period, may direct for entertainment of such application.
(2) in case of non-compliance of the procedures specified in clause (1), the Letter of Approval shall not be considered for renewal.
(3) the Development Commissioner may renew the Letter of Approval for a period of five years or for a shorter period, in form F 2, based on the evaluation of the Unit as per sub-rule (6B):
(6B) The renewal of Letter of Approval shall be based on the evaluation of the following criteria, namely:- (i) Export performance of the Unit in the last block vis-a-vis the initial export projection submitted by the Unit.
(ii) Projected employment with reference to actual employment generated.
(iii) Instance of violation of applicable statutes related to the functioning of the Unit.
(iv) Cases of default, if any, of statutory payments.
(v) Undertaking of any activity not sanctioned or approved by the Development Commissioner.
(vi) The decision of the Development Commissioner or Approval Committee in this regard shall be final and binding on the Unit except in cases where the Unit prefers an appeal before the Board of Approval, in accordance with rule 55.”.
12. In the said rules, in Chapter IV, for the Chapter heading, the following Chapter heading shall be substituted, namely:-
“TERMS AND CONDITIONS FOR GRANT OF PERMISSION TO OPERATE INCLUDING AVAILING EXEMPTIONS, DRAWBACKS AND CONCESSIONS”.
13. In the said rules, in rule 22, -
(i) in sub-rule (1), -
(a) after the words “Grant of”, the words “permission to operate including availing” shall be inserted;
(b) in clause (ii), after the word “contractor”, the words “including the sub-contractor” shall be inserted;
(c) in clause (iv),-
(A) in sub-clause (b), -
(a) after the words “on import or procurement” occurring at both the places, the words “of goods and services” shall be substituted;
(b) after the words “packing materials”, the words “and services” shall be inserted;
(B) in sub-clause (c), after the words “additional goods” the words “and services” shall be inserted;
(ii) in sub-rule (2), for the words “and such accounts”, the words “either in register form in hard copy or time stamped digital form, ” shall be substituted.