Frequently Asked Questions

Is there any export obligation for SEZ unit ?

There is no export obligation. However, the SEZ unit has to achieve positive NFE during its 5 year period of operation.

If any excise duty has been paid by a SEZ unit under certain circumstances, whether it can be re-imbursed or not ?

There is no such provision for re-imbursement of excise duty paid by a SEZ unit.

Is there any time limit for realization of export proceeds by SEZ unit ?

No. There is no time limit prescribed.

Whether a Trading Unit/Free Trade warehousing unit can export in Indian Rupees ?

No. All transactions by a unit in Free Trade and warehousing zone shall only be in convertible foreign currency. [Rule 18(5)/ Rule 45(2)]

Whether Development Commissioner/Approval Committee can permit proposal for broad banding/diversification or change in the items of manufacture?

Yes. The Approval Committee may approve the above proposals [Rule 19(2)]

Is there any minimum investment criteria for setting up a unit in SEZ ?

There is no minimum investment criterion for setting up a unit at SEZ.

What are the default authorized operations which can be undertaken by the Developer/approved Co-developer by default from the date of the Notification?

Consolidated list of default authorized operations which can be undertaken by the developer/approved co-developer by default from the date of notification is contained in the Department of Commerce Instructions No:50

The DC's/UAC's may allow Developer/approved Co-developers duty free goods and services for these default authorized
operations from the date of notification of the SEZ. These authorized operations will, however, continue to be subject to the various guidelines issued by Government from time to time. Approval Committees while approving goods and services for such default operation may look into the actual requirement of the SEZs for such operations.
(Instructions No:50 Department of Commerce)

What is the procedure to be followed for increasing/decreasing the SEZ area?

The requests for increase/decrease of SEZ area should be routed through the concerned Development Commissioner in the formats prescribed by the Department of Commerce vide Instruction No:24.

What is the policy regarding "Grant of Extension of Validity of in-principle approvals"?

The following guidelines issued by the Department of Commerce will apply in cases where:

i) The request for extension had been filed before the expiry of the LoA and
ii) Where steps for implementation of the proposal like acquisition/purchase of land etc. have been taken;

The Letter of Approval (LoA) may be extended for 1 more year beyond the original validity. While extending the in-principle LoAs, any approvals given for area of more than 5000 hectares may be capped at 5000 hectares to align all such approvals as per the Government decision in this regard.

Type of SEZ Conditions for grant of 2nd Extension
IT/ITES/G&J/Biotech/Nonconventional Energy SEZ etc. with min. Area requirement of 10 Ha and Stand alone FTWZ. No second extension to be granted in such cases
Sector Specific SEZs other than mentioned above Conditions for grant of first extension will be applicable. Apart from this, the developer must have 60% land acquisition/ possession.
Multi-product Conditions for grant of first extension will be applicable. Apart from this, the developer must have 50% land acquisition/possession

(Instruction no 22 of Department of Commerce).

Can IT/ITES Sector specific SEZ house Hardware units ?

No approval of BoA is required for broad-banding as IT/ITES includes both Hardware and Software. (Instruction no 52 of Department of Commerce).