Commerce ministry seeks India Inc's views on SEZ law
India Inc will have to wait till September for the rules through which the recent law on special economic zones (SEZs) will be operated.
By TNN |
NEW DELHI: India Inc will have to wait till September for the rules through which the recent law on special economic zones (SEZs) will be operated. The commerce & industry ministry is examining the domestic industry’s comments on draft SEZ rules. A meeting of development commissioners (DCs) of all SEZs will be convened soon to discuss the changes that need to be incorporated, GK Pillai, additional secretary in the commerce department, said here today.
The DCs will also consult the domestic industry and a second draft of the rules will be circulated soon, Mr Pillai said at a seminar jointly organised by PricewaterwaterhouseCoopers (PwC) and the Export Promotion Council (EPC) for export oriented units (EOUs) and SEZs. The rules will be notified after discussing the second draft with the industry and other arms of the government, he said.
Once the rules are notified, they will be placed before the Parliament. While changes to the SEZ law need mandatory approval from the Parliament, the government can notify changes to the rules. However, the rules have to be placed before the Parliament which can seek changes if it deems fit.
The DCs will also consult the domestic industry and a second draft of the rules will be circulated soon, Mr Pillai said at a seminar jointly organised by PricewaterwaterhouseCoopers (PwC) and the Export Promotion Council (EPC) for export oriented units (EOUs) and SEZs. The rules will be notified after discussing the second draft with the industry and other arms of the government, he said.
Once the rules are notified, they will be placed before the Parliament. While changes to the SEZ law need mandatory approval from the Parliament, the government can notify changes to the rules. However, the rules have to be placed before the Parliament which can seek changes if it deems fit.
Mr Pillai urged India Inc to provide suggestions on SEZ rules so that the enabling environment is conducive for business. All efforts will be made to bring out simple rules, he added. LB Singhal, director-general of the EPC for EOUs and SEZs, said 51 new zones have been approved. Of the 11 SEZs in operation, seven are promoted by the government. Representatives of PwC said the concerns of investors should be addressed, while Mr Pillai acknowledged that various issues need detailed examination. The SEZ law is unique since it overrides various other laws relating to a number of subjects, including taxation. The new legislation has defined SEZ as a specifically delineated duty free enclave, deemed to be outside the customs territory of India.
The objectives of SEZs include making available goods and services free of taxes and duties supported by integrated infrastructure for export production, quick approval mechanisms and a package of incentives to attract foreign and domestic investment for promoting exports.
The policy relating to SEZs, so far contained in the foreign trade policy, was originally implemented through piecemeal and adhoc amendments to different laws, besides executive orders. In order to avoid these pitfalls and to give a long-term and stable policy framework with minimum regulation, the SEZ Act, ’05, was enacted. The Act provides the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development as well as for units operating in SEZs.
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