The federal government is contemplating a number of measures resembling a versatile framework for promoting merchandise manufactured in SEZs within the home market, straightforward de-notification norms, and simplification of unit approval processes, an official mentioned.
The purpose is to assist revive the SEZs and facilitate commerce transactions between the SEZs and the Home Tariff Space (DTA) or native market. Particular financial zones are areas handled as overseas territories with respect to commerce and customs duties, with restrictions on duty-free gross sales outdoors these areas within the home market.
To acquire the views of assorted ministries on these measures, the Ministry of Commerce distributed a memorandum on the draft Particular Financial Zones Modification Regulation of 2023.
Inter-ministerial consultations are going down at a fast tempo and the draft legislation is more likely to be offered within the subsequent winter session of Parliament, which can start on December 4 and proceed till December 22.
The official, who didn’t want to reveal his identify, mentioned that this modification invoice can be launched rather than the proposed Growth of Enterprise and Service Facilities (DESH) invoice.
“The Modification Invoice goals to assist revive SEZs and facilitate enterprise transactions between SEZs and DTA. It proposes to permit gross sales from SEZs to DTA on payment waiver foundation; permit partial de-notification of zones; simpler notification standards; simplify approval of zones Particular financial official added.
Just lately, Commerce and Trade Minister Piyush Goyal mentioned that the federal government is seeking to ease some restrictions on models in SEZs to spice up the expansion of the sector.
The International Commerce Analysis Initiative (GTRI) in its report urged to the federal government to permit merchandise manufactured in SEZs to be bought within the home market on fee of waived duties on inputs as this might assist in enhancing worth addition.
At current, models in SEZs are allowed to promote their merchandise in DTA on fee of customs responsibility on manufacturing (completed items) foundation. The federal government already permits DTA gross sales on fee of input-based waived responsibility for corporations working below the Manufacturing and Different Warehouse Operations Rules (MOOWR) scheme, mentioned Ajay Srivastava, co-founder of GTRI.
Srivastava mentioned the federal government may “prolong the identical concession to the SEZs with the intention to carry equality. This may encourage worth addition inside the SEZs, as a result of generally, the tariff on remaining merchandise is larger than the tariff on inputs.”
He added that SEZ models may be incentivized to extend worth addition to profit from DTA gross sales, which might additional improve technological development and talent improvement.
Corporations or models working inside SEZs are permitted to import supplies and elements duty-free, offered that the ultimate items produced outdoors India are exported and bought within the Indian home market after fee of customs duties relevant to the manufacturing.
SEZs have emerged as an vital contributor to India’s exports. Whole exports from these areas reached US$155.8 billion in 2022-2023. These included US$61.6 billion in items and US$94.2 billion in providers exports.
(Solely the title and picture of this report might have been reworked by Enterprise Customary employees; the remainder of the content material is auto-generated from a syndicated feed.)
(tags for translation)Commerce Coverage