Saturday, January 20, 2007

New SEZs norms may cost developers in case of delays

PTI[ SATURDAY, JANUARY 20, 2007 06:06:53 PM]

NEW DELHI: Government has planned major changes in the Special Economic
Zones (SEZ) rules that it will come down heavily on developers who do
not start work for operationalising their zones even after final
clearance of the Board of Approvals.

"We propose to make it mandatory on developers to complete all
formalities for notification of their zones within six months of getting
final approval, failing which their clearances will be cancelled,"
Commerce Secretary and Chairman of Board of Approvals G K Pillai said.

There are as many as 70-80 cases where the more than six months have
passed and the developers have not come for getting their projects
notified, he said during a stock-taking exercise on SEZs.

The today's interactive session with Export Promotion Council for EoU
and SEZs will provide inputs to the BoA for fine tuning of the rules.

The scope of changes in rules will also extend to the tax benefits that
co-developers of the SEZs and their contractors and sub-contractors
should get.

"In the proposed amendments even co-developers and contractors and
sub-contractors will be given the tax concessions," he said.

Apart from some of the bigger issues, the amendment to rules will
clarify lot of issues that have come up since the SEZ Act has become

When SEZ Act was set a single window clearance mechanism was envisaged
but it has not yet come into force.

Pillai said the Commerce Ministry was in touch with state governments to
amend their laws so that the single window clearance system could be
operationalised. Earlier inaugurating the interactive session, Pillai
said there was no need to amend the SEZ Act but certain concessions
would have to be made in SEZ rules.

"Some small issues have come up in implementation of the Act and some we
will change to suit requirements of everybody," he said.

Pillai said so far 63 SEZs have been notified and investments worth Rs
11,000 crore has been received since the SEZ Act was operationalised.

He said by 2009 more than Rs 60,000 crore investment would flow in to
SEZs and they could create nine lakh jobs.


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