Govt directive may help SEZs avail of fiscal sops

NEW DELHI: Units located in special economic zones (SEZs) would find it easier to avail fiscal incentives provided under the SEZ Act. The government has told customs and excise commissioners that all activities relating to SEZs will be guided by provisions contained in the SEZ Act of 2005 and the SEZ Rules of 2006.


Speaking to ET, ministry sources said officials with the directorate of revenue intelligence have assured the commerce ministry that they would instruct all their officials to follow instructions from the commerce department.

According to the CBEC spokesperson, all previous circulars have become infructuous. She added that the department of revenue was working on a new comprehensive circular incorporating the provisions in the SEZ Act.

However, in the mean time, the instructions issued by the commerce department will hold good for field formations.

The commerce department, in the last few months, has been flooded with complaints from SEZ units, claiming excise officials were not willing to allow them duty-free procurement of goods from the domestic tariff area (DTA).

The official instruction stated that specific representations have been received regarding non-implementation of Rule 30 of the SEZ Rules, 2006, which provides the procedure for procurement of goods by SEZ units from the DTA without payment of central excise.

As per the instruction, the SEZ Act has been enacted by Parliament, and all activities relating to SEZs will be guided by the provisions contained in the SEZ Act and Rules.

By virtue of Section 51 of the SEZ Act, the provisions of the SEZ Act and the Rules will have overriding effect over the provisions contained in any other Act, it said.

The note further said that the provisions of Sections 20, 21 and 22 of the SEZ Act relating to single agency, single enforcement officer and inspection, search and seizure have not yet been operationalised.

Hence, as long as these Sections are not operationalised, different agencies and officers, as empowered under the relevant Acts before enactment of the SEZ Act, will continue to operate till such time these provisions of the SEZ Act take effect.