Sales To Sezs Deemed Exports

Plan to enable SEZ exporters to access funds at global rates

Identifying special economic zones (SEZs) as an engine for growth and giving a call to foreign direct investment, Commerce Minister Arun Jaitley today said his ministry was in consultations with the finance ministry and the Reserve Bank of India to devise a suitable package for offshore banking units. This will enable exporters in the SEZs in accessing funds at international rates.

The new scheme allows sales from the domestic tariff area to SEZs to be treated as exports, entitling domestic suppliers to drawback and DEPB benefits and exemption from the central sales and service taxes.

 

While the ministry has been planning to introduce a comprehensive legislation on SEZs soon, it will also explore the possibility of developing a scheme for export-oriented units in select sectors with capital investment in plant and machinery over Rs 25 crore.

The bunch of concessions for SEZs includes allowing foreign-bound passengers take goods from SEZs to promote trade, tourism and exports, exempting domestic sales by units in the zones from special additional duty (SAD) and duty-free imports of goods required for operation and maintenance of SEZ units.

The restriction of one-year period for remittance of export proceeds has been done away with for units in SEZs and netting of export has been permitted for these units provided it is between the same exporter and importer over a period of 12 months.

The SEZ units have also been allowed to take job-work abroad and export goods from there. In a move towards further opening up the rupee on the capital account, the SEZ units can now capitalise import payables.

The value of capital goods imported by SEZ units can now be amortised uniformly over 10 years and the units can sell all products including gems and jewellery through exhibitions and duty free shops or shops set up abroad.

The wastage for sub-contracting by gem and jewellery units in transactions between SEZ and DTA would also be allowed now. The ministry has also allowed agriculture and horticulture processing SEZ units to provide inputs and equipment to contract farmers in DTA to promote production of goods as per the requirement of importing countries. This would facilitate integration of production and processing and help in promoting SEZs specialising in agricultural exports.