PREMEABLE:

Government of India have announced a Policy of Special Economic Zones (SEZs) during March 2000 with a view to augmenting infrastructure facilities for export production. Setting up of Special Economic Zones are permitted in the public, private, joint sector or by the State Governments. These SEZs are to be deemed foreign territory for tariff and trade operations. The concept of SEZ is expected to bring large dividends to the State in terms of economic and industrial development and the generation of new employment opportunities. The SEZs are expected to be engines for economic growth.

Gujarat has remained in the forefront of industrial development. The establishment of first SEZ in the country has been approved in Gujarat under SEZ Policy of GOI. In addition, the existing Free Trade Zones namely Kandla Free Trade Zone and Surat Export Processing Zone have been converted into Special Economic Zones and these are in operation in the State. Besides, there are new proposals to establish SEZs in the State.

The Central Government has offered various incentives and facilities both to developer of SEZ as well as the industrial units coming up in SEZ. All kind of units namely manufacturing, trading or service activities are permitted in SEZ. All approvals are to be given by the Development Commissioner for establishment of the unit in SEZ. The State Governments are required under the scheme to offer specified facilities and concessions for promotion of units in SEZs.

In the context of Government of India guidelines for the establishment of SEZs, the matter of formulating a policy regarding the dispensations which the State Government will accord to promote the development of SEZs, has been under consideration of the State Government for some time past. After careful consideration, it has now been decided that the following policy will apply to all SEZs in the State namely Kandla SEZ, Surat SEZ and proposed SEZ at Positra, Mundra and Dahej and at any other locations where SEZ may come up in Gujarat, subject to the framework of SEZ determined by Government of India from time to time.

RESOLUTION

1. MANAGEMENT OF ZONES

The management of the Special Economic Zone will be under the designated Development Commissioner. The Development Commissioner will grant all the permissions as Single Point Clearance from his office. These will include registration of the unit, allocation of land, permission for construction of building and approval of building plan, power connection, environmental clearance, water requirement etc.

SEZs in the State will be declared as Industrial Township (Notified Area).

2. POWER

The SEZ authority will ensure continuous and quality power supply to SEZ units.

SEZ developer will be permitted for arrangement of power through establishment of power project as independent power producer (IPP) as well as transmission and distribution of power. SEZ developer will approve power connections and carry out billing of units in the SEZ.

The SEZ authority may also ensure standby arrangement through establishing grid connectivity so as to draw power from Gujarat Electricity Board subject to their entering into a separate agreement with GEB on mutually acceptable terms.

SEZ units shall be exempted from electricity duty for ten years period, from the date of production or rendering of services.

SEZ units will be granted automatic approval to set up captive power plant.

3. ENVIRONMENT

Applications for site clearance, NOC, consent order and other clearances required from Gujarat Pollution Control Board for units and activities within SEZ under different Acts except for the industry/activities which require clearance from Ministry of Environment and Forests (MOEF), Government of India will be accepted by Development Commissioner of the SEZ. An officer of GPCB may be deputed to work as Nodal Officer under supervision and administrative control of Development Commissioner of the SEZ to grant approvals and requisite powers will be delegated to Development Commissioner, SEZ.

GPCB has declared 80 industries which are exempted from requirement of obtaining NOC. Those are however, restricted to small scale industrial units only. The list of industries exempted from obtaining NOC will be extended to medium and large industries also. A separate exercise will be carried out to expand the list and to further streamline the system for speedy single point environmental clearance without diluting in any way compliance with environmental protection parameters.

4. WATER

The SEZ developer will be granted approval for development of water supply and distribution system to ensure the provision of adequate water supply for SEZ units.

5. LABOUR REGULATIONS

The powers of the Labour Commissioner, Government of Gujarat shall be delegated to the Development Commissioner in respect of the area within the SEZs. An Officer will be designated and placed under the supervision and control of Development Commissioner, SEZ. He will function as Registration Officer, Conciliation Officer as well as Inspector under various Labour Laws to provide Single Window Service.

As a part of liberalization process for filing returns, a Consolidated Annual Report (CAR) has been designed, consolidating various periodical returns (quarterly, half yearly etc.) under following Acts.

1. Workmen Compensation Act, 1923
   
2. Payment of Wages Act, 1936
   
3. Factories Act, 1948
   
4. Minimum Wages Act, 1948
   
5. Maternity benefit Act, 1961
   
6. Payment of Bonus Act, 1965
   
7. Contract Labour (Regulation and Abolition) Act, 1970

The units in SEZ will be required to file annually Consolidated Annual Report (CAR) to Development Commissioner, SEZ. The units in SEZ will not be required to file periodically separate returns.

All industrial units and other establishments in SEZ will be declared as "public utility service " under the provisions of Industrial Dispute Act.

For inspections relating to workers' health and safety, units will be permitted for obtaining inspection reports from accredited agencies as may be notified by the State Government.

6. SALES TAX AND OTHER LEVIES:

(a) Complete exemption on payment of Stamp Duty and Registration Fees on transfer of land meant for industrial use in the SEZ Area.

(b) Complete exemption on payment of stamp duty and registration fee for loan agreements, credit deeds, mortgages etc. pertaining to SEZ units or which will be executed within the SEZ area.

(c) Transactions within the SEZ shall be exempted from all State taxes including Sales Tax, VAT, Motor spirit tax, luxury tax and entertainment tax, purchase tax and other state taxes.

(d) Inputs (goods and services) made to SEZ units from Domestic Tariff Area (DTA) will be exempt from Sales tax and other State taxes.

(e) Any sales from SEZ to DTA will be treated as import and import duty will be applicable as per GOI policy. Sales tax will be applicable to SEZ goods as applicable to other imported goods. Same Rules and Procedure will be applicable to SEZ goods as applicable to normal imports.

(f) Due to tax system constraints, if it is not possible to grant direct exemption to any transactions, such payment of State taxes will be reimbursed to the SEZ units.

(g) The SEZ developer and SEZ units will be eligible to avail exemption under (a) to (f) above during implementation period as well.

7. LAW AND ORDER

The State Government shall take required suitable steps within the SEZs for the maintenance of law and order.

8. COMMITTEE FOR REVIEW AND DEVELOPMENT OF SEZs.

Following Committee is hereby constituted to resolve various issues pertaining to the promotion, development and functioning of SEZs in the State.

These orders are being issued with the concurrence of the Finance Department given vide their note dated 27.6.2002 on this department file of even number.