DR.

HARI SINGH GOUR UNIVERSITY

SAGAR (M.P)

MID II ASSIGNMENT
SPECIAL ECONOMIC ZONE (SEZ)
SESSION 2023-24
UNDER THE GUIDENCE OF : SUBMITTED BY :
DR.P.VAKULA KUMARI 1.PRADEEP KUMAR (Y23282043)
2.KARAN KHULBE (Y23282011)
3.NAMAN JAIN (Y23282020)
4.VIVEK KUMAR YADAV (Y20282038)
5.NEELENDRA SRIVASTAVA (Y23282022)
6.RAVI KUMAR MAHTO (Y23282027)
 SPECIAL
ECONOMIC ZONE
(SEZ)
Introduction
 A Special Economic zone (SEZ) is a geographical region that is designed
to export goods and provide employment. SEZs are exempt from
federal laws regarding taxes, quotas, FDI-bans, labor laws and other
restrictive laws in order to make the goods manufactured in the SEZ at a
globally competitive price.

 It is a specifically delineated duty-free enclave and shall deemed to be a

foreign territory for the purposes of trade operations and duties and
tariffs.

 To provide and internationally competitive and hassle-free

environment for exports.
Aim of SEZ’s

The policy intended to make these

SEZs an engine for economic growth
supported by quality infrastructure
complemented by an attractive fiscal
package with minimum possible
regulations.
 SEZs are exempt from
Promotion of goods
manufacturing in the SEZ federal laws regarding
at a globally competitive taxes, quotas, FDI-
price. bans, labour laws and other
restrictive laws.

Definition of
SEZ

A Special Economic A Special Economic Zone

zone (SEZ) is a (SEZ) has economic laws
geographical region that is that are more liberal than a
designed to export goods country's typical economic
and provide employment. laws.
History of SEZ

China made
the SEZ’s a Revolution
global came in
First known Ireland and SEZ act
concept- 2000-
SEZ- Taiwan introduces
largest inorporatio
Puerto followed- in India-
number of n of SEZ in
1960 2005
Rico-1947 SEZ’s – EXIM
Shenzen policy
1980

SEZ
Categories that SEZ includes
Free trade zones (FTZ)

Free Zones (FZ)

Industrial parks or Industrial estates (IE)

Free economic zones

Urban enterprise zones.

 TYPES OF SEZ :

1.Sector-specific SEZ : Involved in manufacturing one or more good in

a specific sector like electronic goods, or one or more services.

2.Multi-product SEZ : Involved in manufacturing multiple goods or

providing multiple services in a specific sector or across different sectors.

3.SEZ in a port/ airport; or for free trade and warehousing :

Involved in manufacturing of goods in two or more sectors, entailing
trading and warehousing.
SPECIAL ECONOMIC ZONES (SEZ)
IN INDIA
History of SEZ in India
 India was one of the first in Asia to recognize the
effectiveness of the Export Processing Zone (EPZ) model
in promoting exports, with Asia’s first EPZ set up in
Kandla in 1965.

 With a view to overcome the shortcomings experienced on

account of the multiplicity of controls and clearances;
absence of world-class infrastructure, and an unstable
fiscal regime and with a view to attract larger foreign
investments in India, the Special Economic Zones (SEZs)
Policy was announced in April 2000
 From 1965 onwards, India experimented with the
concept of such units in the form of Export Processing
Zones (EPZ).

 But a revolution came in 2000, when Murlisone

Maran, then Commerce Minister, made a tour to the
southern provinces of China. After returning from the
visit, he incorporated the SEZs into the EXIM Policy of
India. Five year later, SEZ Act (2005) was also
introduced and in 2006 SEZ Rules were formulated.
 Facilities of SEZ in India
Exemption on duties on Indian capital goods and inputs are offered as per the
requirements of the approved business activity

Taxes are either exempted or waived and even reimbursed in case they are paid in
advanced to the concerned authority

Duty-free imports of spares, raw materials, capital goods, and consumables are offered as
per the requirements of the approved business activity

Preferential treatment of these units to the Indian market for easy dissemination of their
products and / or service

Facilitated to retain 100 % in foreign currency in EEFC ( Exchange Earners' Foreign

Currency) account

Total tax exemption on corporate incomes as per the provisions of Section 10 A and 10 B of
the Indian Income Tax Act

Easy and automatic acceptance system for use of existing trademarks, brand names and
technological know-how
 Generation of
additional
economic
activity

Developme
Promotion
nt of
of exports
infrastructu
of goods
re facilities
and
services
objectives

Promotion of
Creation of
investment
employment
from domestic
opportunities
and foreign
sources
 The salient features/provisions of SEZ
Rules
Different minimum land requirement for different class of SEZs;

Every SEZ is divided into a processing area where alone the SEZ units would come up
and the non-processing area where the supporting infrastructure is to be created;

Simplified procedures for development, operation and maintenance of the Special

Economic Zones and for setting up units and conducting business in SEZs;

Single window clearance for setting up of an SEZ;

Single window clearance for setting up a unit in a Special Economic Zones;

Single window clearance for matters relating to Central as well as State Governments;
 SEZ APPROVAL MECHANISM :
1.The developer has to submit the proposal to the
state government.
2.The state government forwards this proposal to
the BoA.
3.A 19 member board takes the decision
considering the merits of the proposal.
4.Once the BoA gives its approval, and the central
government notifies the area of the SEZ, units are
allowed to be established inside the SEZ.
Advantages
 15 year corporate tax holiday on export profit.
 Allowed to carry forward losses.
 No license required for import made under SEZ units.
 Duty free import of goods for setting up of the SEZ units.
 Exemption from payment of Service Tax.
 Setting up Off-shore Banking Units (OBU) allowed in SEZs.
Disadvantages
Revenue losses because of the various tax exemptions
and incentives.
Acquire land at cheap rates and create a land bank.
May not match up to expectations.
Hurdles And Key Challenges
.
Land acquisition is not easy

.
Environment Hurdle, Locating SEZ and
due exercise of control

.
Landless farmer and exploitation of
labour
Conclusion
.
SEZ policy has increased economic
activity

.
The companies are able to reap rich
dividends with minimum investments

.
Need to develop an better SEZ model in
which all the parties involved get benifted