Customs duty cannot be levied on electricity supplied from a special economic zone (SEZ) to the domestic market, ruled the Supreme Court on Monday while upholding Adani Power's appeal against a 2019 judgment of the Gujarat high court. The 2019 judgment had denied relief to Adani Power from Customs duty on electricity supplied from its Mundra SEZ unit to the domestic tariff area (DTA).
References to the repealed laws for service tax, purchase tax, etc, continue in the SEZ laws.
With the fate of the Development Enterprise and Services Hub (DESH) Bill in limbo, the commerce department is working towards tweaking some rules under the existing special economic zone (SEZ) law to allow use of unutilised spaces in IT/ITES for non-SEZ purposes. The move, when implemented, will free-up the land area that is not in demand through partial de-notification of certain floors or buildings, thereby allowing easier exit. "The department of commerce is discussing the matter with the revenue department before making changes in the Special Economic Zone Act, 2005," a person aware of the matter
Within a fortnight of Commerce Secretary G K Pillai talking about a possible relaxation of cap on land size for SEZs, Commerce and Industry Minister Kamal Nath said on Tuesday there was no proposal to change the 5,000 hectare ceiling prescribed by a group of ministers. However, the Centre would look at specific proposals from states once the Resettlment and Rehabilitation Policy is implemented, he said.
The matter has now been escalated and the ministry has written to Customs, Bureau of Indian Standards (BIS) and the Directorate of Revenue Intelligence (DRI) to investigate it thoroughly.
SEZ in Mundra, Gujarat denotified for three violations.
The department of commerce may de-recognise the 247-hectare engineering special economic zone at Hazira, promoted by Essar Hazira SEZ Ltd.
The government has approved a Rs 675 crore (Rs 6.75 Special Economic Zone by Finnish telecom major Nokia near Chennai.
Its new industrial policy appears to benefit industrial houses
The multi-product SEZ will bring in more than Rs 2.11 lakh crore of net foreign exchange in 30 years.
Analysts point out that exporters outside SEZs enjoy Cenvat credit against service tax paid on a host of services subscribed to while engaging in export-related activities. In addition, the department of revenue recently permitted service tax exemption on seven services used by exporters.
The Centre is unlikely to offer new direct tax incentives for units operating in special economic zones (SEZs) and may instead allow the grandfathering of previous exemptions that such units were entitled to, according to proposed amendments to the SEZ Act, 2005, people aware of the matter said. The amendments, proposed by the commerce department, will soon be considered by the Cabinet for approval. This represents a departure from the department's earlier plan to introduce these changes through the Development Enterprises and Services Hubs (DESH) Bill, 2023, which faced strong criticism from the ministry of finance.
An empowered group of ministers had effected on April 5 major changes in SEZ rules, also setting the 5,000 hectare cap.
"We will learn from their experiences of becoming crorepatis," he said. Kalbhairva also intends to talk to financial institutions for assistance and is even planning an initial public offer.
The commerce ministry had, in March, put on hold this change in the SEZ rules.
The Supreme Court on Monday dismissed a plea filed by Sebi against a Securities Appellate Tribunal order which set aside the penalty imposed by the market regulator on RIL chairman Mukesh Ambani and two other entities in a case related to alleged manipulative trading in shares of the erstwhile Reliance Petroleum Ltd (RPL) in November 2007. A bench of Justices J B Pardiwala and R Mahadevan said it was not inclined to interfere with the order passed by SAT.
The decision was taken in the meeting of the Board of Approval headed by Commerce Secretary Rajeev Kher on September 18.
Developers had been urging dual usage of their SEZ land since the beginning of global financial recession in 2008.
However, the ministry of law opined that though there is no specific provision in the SEZ Act and Rules, the power to notify includes power to de-notify also, sources said. Industry experts said that the SEZs which are finding it difficult to continue should be allowed to quit.
The Development Commissioners have recommended to the Board of Approval to cancel these SEZ projects.
SEZs account for just about a third of India's merchandise exports (and roughly the same proportion of services exports). Yet, the notion of creating global manufacturing centres of the kind that propelled China to superpowerdom retains a durable appeal within the Indian policy-making establishment, notes Kanika Datta.
None of Adani group portfolio companies, comprising 11 listed firms, have been accused of any wrongdoing, conglomerate's CFO Jugeshinder Robbie Singh said on founder and chairman Gautam Adani's indictment on bribery charges in the US. In a post on X, Singh said the group would make a detailed comment on the US indictment once it gets counsel approvals.
Earlier, the government had prohibited use of second hand machinery in SEZs to prevent migration of units from Domestic Tariff Area to the tax free zones.
The Securities Appellate Tribunal (SAT) on Monday set aside the penalty imposed by Sebi on Reliance Industries Ltd's chairman Mukesh Ambani and two other entities in a case related to alleged manipulative trading in the shares of erstwhile Reliance Petroleum Ltd (RPL) back in November 2007. The ruling has come after all the entities appealed before the tribunal against the order passed by the Securities and Exchange Board of India (Sebi) in January 2021. In January 2021, Sebi imposed a Rs 25 crore fine on Reliance Industries Ltd(RIL), Rs 15 crore on Ambani, who is the company's chairman and managing director, Rs 20 crore on Navi Mumbai SEZ Pvt Ltd and Rs 10 crore on Mumbai SEZ Ltd in RPL case.
Special Economic Zones are likely to be central to realising Prime Minister Narendra Modi's ambitious Make in India agenda.
According to a department notification, Tech Mahindra has approached the Board of Approvals under the Department of Commerce for transferring rights of three SEZs (one in Tamil Nadu and two in Andhra Pradesh) and the proposal will come up for a discussion before the BoA on August 30.
Changing the rules of the game for developers or units who have already committed funds upsets the financial calculations that guided the investment decision. It is another matter if the government makes it clear that newcomers will be subject to taxes.
A possible solution would be to set them up in the barren land or in land with low agricultural productivity.
The eGoM on SEZ, headed by External Affairs Minister Pranab Mukherjee could not meet since January 2007, as controversies and violent protests broke out on the issue.
Clamping down on the delays in repatriating foreign exchange earnings, the Reserve Bank of India (RBI) has tightened norms for special economic zones (SEZs), asking them to realise and bring back full value of goods and services to India within a year from the date of export.
Clarifying the issue of applicability of penal provisions in SEZs, the government said the the SEZ would come under the the Foreign Trade (Development and Regulation) Act. The Foreign Trade Act provides for punishment for violation of the foreign trade rules. Besides exporters and importers, it also covers export-oriented units.
Senior officials say the government might come up with an incentive package for the SEZs following the release of Foreign Trade Policy.
The JD-U flayed the ruling United Progressive Alliance government for its policy on special economic zones calling it "the biggest real estate scam in India" and sought immediate suspension of implementation of the "anti-farmer act".
Reflecting the enthusiasm among private companies for setting up special economic zones, the board of approval for SEZs will consider over 100 proposals on March 17 - its first meeting since the implementation of SEZ Act and Rules last month.
Prime Minister Manmohan Singh has asked the Finance Ministry to remove a flaw in the tax laws, which would help IT/ITeS SEZs, even as the government is considering relaxing rules for tax-free enclaves across sectors on sales in the domestic market.
The Reserve Bank of India on Thrusday ruled out any concessional finance to developers and units in these zones, saying they should be treated on par with real estate projects.\n
Developers will soon be allowed to transfer used plant and machinery of up to 20 per cent of their total capital goods requirement to special economic zones they set up.
The ruling came after Maha Mumbai SEZ Sangharsh Samiti, a local organisation opposing the SEZ, on Friday informed the high court that a public interest litigation relating to the project is pending before the Supreme Court.
Senior government officials says the matter was discussed at a meeting of the ministerial group on special economic zones (SEZ) last week.
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