SEZ

A special economic zone (SEZ) is an area in which business and trade laws are different from rest of the country.

SEZs are located within a country’s national borders, and their aims include: increased trade, increased investment, job creation and effective administration.

To encourage businesses to set up in the zone, financial policies are introduced. These policies typically regard investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies may be offered tax holidays, where upon establishing in a zone they are granted a period of lower taxation.

The creation of special economic zones by the host country may be motivated by the desire to attract foreign direct investment (FDI).

The benefits a company gains by being in a special economic zone may mean it can produce and trade goods at a lower price, aimed at being globally competitive.

In some countries the zones have been criticized for being little more than labor camps, with workers denied fundamental labor rights

A commerce ministry-appointed panel has suggested that the Board of Approval (BoA), the highest decision-making body for SEZs, should be given additional powers to exempt units and developers from certain rules to promote these zones.

Under the existing SEZ (special economic zones) rules, the BoA has no power to relax any rule.

The inter-ministerial board BoA is headed by the commerce secretary.

Submission of GST registration certificate instead of sales tax registration.

Setting up of an SEZ Rules Interpretation Committee. The five-member committee would include officers from commerce and finance ministries. This measure will help in ease of operations.

Cut in paper work for setting up of SEZ units. One copy of consolidated application seeking permission for setting up of a unit and other clearances shall be made to the Development Commissioner. Currently, there is requirement of five copies of application for setting up of unit in SEZ to the commissioner.