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Special Economic Zone
Special Economic Zone (SEZ) is a special duty-free enclave designed to promote foreign investments in a comprehensive range of economic activities from manufacturing at one end to trading and financial services on the other in an infettered business environment.
Under a special policy dispensation promulgated by the Central Government in April, 2000, businesses will operate under high quality policy and business friendly regulatory environment free of hassles and red tapism. In other words, the operation of the normative and restrictive business/commercial laws will be suspended. Operating entities will be free to pursue their business interests free of government intervention.
The SEZ will provide high quality and world class infrastructure designed to render costs of products, delivery, logistics and transactions competitive on global basis.
While SEZ will be insulated from the domestic tariff area in so far as the negative influences are concerned, it will, none the less, provide the much sought and 'privileged' access to the domestic markets.
Salient Features
- A designated duty free enclave and to be treated as foreign territory for trade operations and duties and tariffs.
- Units are free from plethora of rules and regulations governing import and export.
- Units are able to import capital goods and raw materials duty free from abroad. And also from DTA without payment of terminal excise duty.
- No wastage norms or input-output norms.
- SEZ units would be able to undertake job work from the DTA units and also to get their goods processed in the DTA.
- Sales within DTA area permitted only on payment of applicable customs duties.
- No routine examination by customers of export and import cargo.
- No separate documentation required for customs and exim policy.
- Corporate tax holiday upto 2010 U/S. 10-A of the Income Tax Act.
- No licence required for imports.
- Supplies from DTA to SEZ units treated as deemed exports.
- Reimbursement of central sales tax paid on domestic purchases.
- SEZ units may be for manufacturing, trading or service activity.
- 100% Foreign direct investment in manufacturing sector allowed through automatic route.
- Profits allowed to be repatriated freely without any dividend balancing requirement.
- No industrial licensing restrictions on products reserved for Small Scale Sector.
Uniqueness of SEZ in India
The SEZ policy framework is the most visionary, ambitious and far-reaching initiative of the Government of India (GOI) so far designed to transform fundamentally the 'Foreign Direct Investment (FDI) Landscape' for all times to come. It is designed to provide complete business freedom to large multinational companies which are seeking to globalize their production bases.
The central and distinctive anchors of the SEZ policy framework in India cover the following themes:
- 100% tax break/holiday for ten years upto 2010 (in other countries, tax reliefs are regulated).
- Unrestricted access to domestic markets (with payment of applicable duties/taxes).
- The permissible economic activity in SEZ is vast and it covers trading, servicing, reconditioning, labelling, repacking etc...
- 100% foreign ownership automatically cleared in the manufacturing sector. The Chinese SEZs for long have insisted on the joint venture with local partners.
- 100% foreign investment automatically cleared in the manufacturing sector.
Advantages of Navi Mumbai SEZ
- NMSEZ is located in the heart of Navi Mumbai and comprises four zones namely Dronagiri, Kalamboli, Ulwe and JNPT area. It has several natural advantages vis-a-vis other SEZs in India .
- Access to Mumbai, a regional and national trading centre for many products.
- Access to cheap and skilled manpower - Reputed national and international educational institutes including engineering colleges, managements institutes etc. provide skilled and capable manpower. Further, India 's labour costs are significantly lower than other developed countries thereby providing outsourcing opportunities.
- Access to social infrastructure - CIDCO has developed the residential areas in Navi Mumbai and Belapur region. These residential units are ready for occupation.
- Access to huge urban markets - Mumbai, Navi Mumbai and Pune, having a population base of approximately 15 million, are within the catchment area of the SEZ.
- Access to finance - NMSEZ's proximity to Mumbai, the commercial centre and financial capital of the country, will provide unlimited access to capital, to the units located in NMSEZ.
Proximity to International and Domestic transportation infrastructure
a) Jawaharlal Nehru Port - an efficient container port providing necessary linkages to the international markets. Mumbai Port- the largest port facility in the country.
b) Chhatrapati Shivaji International Airport - Sahar is at a distance of approximately 60-90 minutes.
c) Well-connected road & rail linkages - National Highways NH3, 4, 8, 9 & 17 link the area to the rest of the country. Further, the area has access to Konkan railway and the Western railway.
d) Water transport - linking South, Mumbai to NMSEZ is expected to boost accessibility to the area.
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