About SEZs

• Special Economic Zone (SEZ) is a geographic area in which the business and trade laws are different from the rest of the country. 
• The objective of developing SEZs include increasing the balance of trade and attracting newer inward-investments into the country, and creating newer jobs. 
• Financial incentives are granted to those setting up SEZs and cover a wider gamut of benefits for investors across taxation, customs, labour regulations, etc. 
• The Special Economic Zones Act, 2005, provides the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development in the country. 
• Presently, 378 SEZs are notified, out of which 265 are operational.  

Salient Features

• The salient features of the SEZ scheme are:-

• A designated duty free enclave to be treated as a territory outside the customs territory of India for the purpose of authorised operations in the SEZ;
• No licence required for import;
• Manufacturing or service activities allowed;
• The Unit shall achieve Positive Net Foreign Exchange to be calculated cumulatively for a period of five years from the commencement of production;
• Domestic sales subject to full customs duty and import policy in force;
• SEZ units will have freedom for subcontracting;
• No routine examination by customs authorities of export/import cargo;
• SEZ Developers /Co-Developers and Units enjoy tax benefits as prescribed in the SEZs Act, 2005.

Objectives

• The notification of SEZs in the country is guided by the following:-
  • generation of additional economic activity;
  • promotion of exports of goods and services;
  • promotion of investment from domestic and foreign sources;
  • creation of employment opportunities;
  • development of infrastructure facilities.

Why in News?

• The government is set to free up unused built-up area worth about ₹30,000 crore and idle land inside Special Economic Zones for other economic activity.
• The move to free up unutilised land parcels is likely to be operationalised by the end of August, as part of a simpler regulatory regime that the government is planning for SEZs, which account for about 30% of India’s exports.

Reference:

1. https://www.thehindu.com/business/Industry/centre-to-soon-free-up-untapped-space-in-sezs/article35861490.ece