History of Free Trade Zones First Free Trade Zone in the world had started on 1 st January 1965 at Kandla Port, Kutch, India. By 1978 India had another four free trade zones at Mumbai, Chennai, Noida and Falta. In 1978 China had gone through major economic make over and they had realized power in concept of Free Trade Zone’s. First Chinese Free Trade Zone became operational in 1984 – ShenzhenIn year 2000 one zone of Shenzhen was Exporting thrice of India. As on today there are about 2000 operation free trade zones spread over 150 countries in world

Path of Special Economic Zone in India Commerce minister Mr. Maran had introduced SEZ Concept in year 1997 for first time in India. SEZ was added ( chapter 7 ) as Export Promotion Scheme in India as part of Exim PolicyFirst Policy on SEZ is came on 1 st April, 2000 and was in power till 2006.Firstly Operation EPZ are transformed into SEZ’sFirst Private SEZ in India has started at Surat by DGDC. In January, 2006 SEZ Act, 2005 and SEZ Rules, 2006 came in force which Separated SEZ’s from FTP SEZ Act, 2005 & SEZ Rules, 2006 got Overriding effect since April, 2006

Current Status of SEZ’s in India Approved SEZ’s 1029 Operational SEZ’s 143 Multi- Product 8 IT/ITES 69 Single Product / Concept Based - 66

Performance of SEZ’s In India Total Exports from SEZ’s in India – About 2,50,000 Crores Export Growth Rate is approx 125 % Direct Employment Generate – approx. 2,25,000 Indirect Employment Generate – approx. 5,00,000 FDI Share in Investment – approx 65%

Benefits & Incentives for SEZ Units Corporate/ Income Tax Benefits for 15 Years No Sun Set Clause Duty Free Enclave through out stay in SEZ Tax Free Enclaves through out stay in SEZ Most operations are online/ single window Liberalized Labor Norms 24 X 7 – 365 Days operations Sub Contracting – Job Works are allowed

Benefits & Incentives for SEZ Units 100% FDI through Automatic Route 100 % Capital A/c Convertibility No Minimum Export Obligation No Fixed Value Addition Norms ( Except Diamonds) Freedom from Industrial Licensing Local Sales is allowed on payment of full duties Declared Foreign Territory for Duties & Taxes Facilities of Offshore banking units

Qualification for Being an SEZ unit Exporter ( Manufacturer / Services / Merchant ) Prospects of Exports Positive Foreign Exchange Earning All exports except prohibited items No cases of eviction pending with CBDT

Benefits for SEZ Developers 100 % Corporate / Income Tax Benefit in block of 10 years 100 % Commercial disbursing of Plots/ Units Duty Free procurements for Development of SEZ Duty Benefits on supporting Infrastructure 100% FDI is allowedDeclared Public Utility Services

Qualification for SEZ Development Minimum Land Requirement for Multi- Product SEZ – 1000 hectors Collective Net worth of Developers of Multi-Product SEZ Crores Minimum Land Requirement for Product Based SEZ – 100 hectors Collective Net worth of Developers of Product Based SEZ - 50 Crores

Concerns regarding SEZ Benefits MAT / AMT Profit Linked / Investment Linked Non- Cooperation of States Difference in Definitions Sec. 10 AA – Re- Structuring Transfer 0f Assets

Path Ahead for Success of SEZ’s Requirement of serious Developers Clarity about New DTC is Pending Compatibility with forthcoming GST Solving issue of overriding authorities Solid & Well- defined Policies / Acts from local governments Stable Central Government Policies

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