A bill to amend the special economic zones law will be introduced in the ensuing session of Parliament to replace an ordinance promulgated in March which will allow trusts to set up units in SEZs.
The introduction of the Special Economic Zones (Amendment) Bill, 2019 was approved by the Union Cabinet in its meeting, chaired by Prime Minister Narendra Modi, here Wednesday.
The bill will replace the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March.
The ordinance had paved the way for trusts to set up units in special economic zones (SEZs).
"The Union Cabinet has approved to introduce a Bill, namely, the Special Economic Zones (Amendment) Bill, 2019, ... to replace the Special Economic Zones (Amendment) Ordinance, 2019. The Bill will be introduced in ensuing session of Parliament," an official statement said.
After an amendment of a section of the SEZs Act, 2005, a trust or any entity notified by the central government will be eligible to be considered for grant of permission to set up a unit in these zones, which enjoy certain tax and other incentives.
The statement said the amendment also seeks to provide flexibility to the central government to include 'trusts' in the definition of a 'person', in a bid to facilitate investments in these zones.
To set up a unit in these zones, which are treated as foreign entities in terms of customs rules, an applicant would have to approach Board of Approval, which is headed by the commerce secretary.
The present provisions of the Act do not permit 'trusts' to set up units in SEZs. 'Person' defined in the Act who are allowed to seek permission for setting up units does not include 'trusts'.
Currently, the definition of 'person' includes an individual, whether resident in India or outside India, a Hindu undivided family, co-operative society, a company, whether incorporated in India or outside, a firm, proprietary concern, or an association of persons or body of individuals, whether incorporated or not, local authority and any agency, office or branch owned or controlled by such individual.
SEZs are major export hubs in the country as the government provides several incentives and single-window clearance system.
The developers and units of these zones enjoy certain fiscal and non-fiscal incentives such as no licence requirement for import; full freedom for subcontracting; and no routine examination by customs authorities of export/import cargo. They also enjoy direct and indirect tax benefits.
Exports from SEZs grew about 15 per cent to Rs 5.52 lakh crore in 2017-18.
Source: economictimes.indiatimes.com