Cabinet Approves
the Special Economic Zones (Amendment) Bill, 2019
The Union Cabinet, chaired by the Prime
Minister Shri Narendra Modi, has approved to introduce a Bill, namely, the Special
Economic Zones (Amendment) Bill, 2019 that is the Bill to replace the Special Economic
Zones (Amendment) Ordinance, 2019 (12 of 2019).
The Bill will be introduced in ensuing session of
the Parliament.
After the amendment of sub-section (v) of section 2 of the
Special Economic Zones Act, 2005, a trust or any entity notified by the Central
Government will be eligible to be considered for grant of permission to set up a
unit in Special Economic Zones.
MINISTRY OF LAW AND JUSTICE
(Legislative Department)
New Delhi, the 2nd March, 2019
SPECIAL ECONOMIC ZONES (AMENDMENT) ORDINANCE, 2019
NO. 12 of 2019
Promulgated by
the President in the Seventieth Year of the Republic of India.
An Ordinance further
to amend the Special
Economic Zones Act, 2005.
WHEREAS Parliament
is not in session and the President is satisfied that circumstances exist which
render it necessary for him to take immediate action;.
NOW, THEREFORE, in exercise of the powers conferred
by clause (1) of article 123 of the Constitution, the President is pleased to promulgate
the following Ordinance: –
1. Short
title and commencement
(1) This Ordinance
may be called the Special Economic Zones (Amendment) Ordinance,
2019,
(2) It shall come
into force at once.
2. Amendment
section 2 of Act.
2. In section 2 of the Special Economic Zones Act, 2005, in clause
(v) –
(i) after the words “local authority”, the words “or trust or entity as may be notified
by the Central Government”, shall be inserted;
(ii) for the words “authority or company”, the words “authority, company,
trust or entity” shall be substituted.
A bill to amend the special economic zones law will be
introduced in the ensuing session of Parliament to replace an ordinance promulgated in March which will
allow trusts to set up units in SEZs.
The introduction of the Special
Economic Zones (Amendment) Bill, 2019 was approved by the Union Cabinet in its
meeting, chaired by Prime Minister Narendra Modi,
on Wednesday, 12 June 2019.
The bill will replace the Special Economic Zones
(Amendment) Ordinance, 2019, which was promulgated in
March.
The ordinance had paved the way for trusts to set up
units in special economic zones (SEZs).
"The Union Cabinet has approved to introduce a Bill,
namely, the Special Economic Zones (Amendment) Bill, 2019, to replace the
Special Economic Zones (Amendment) Ordinance, 2019. The Bill will be introduced
in ensuing session of Parliament," an official statement said.
After an amendment of a section of the SEZs Act, 2005, a
trust or any entity notified by the central government will be eligible to be
considered for grant of permission to set up a unit in these zones, which enjoy
certain tax and other incentives.
The statement said the amendment also seeks to provide
flexibility to the central government to include 'trusts' in the definition of
a 'person', in a bid to facilitate investments in these zones.
To set up a unit in these zones, which are
treated as foreign entities in terms of customs rules, an applicant
would have to approach Board of Approval, which is headed by the commerce
secretary.
The present provisions of the Act do not permit 'trusts'
to set up units in SEZs. 'Person' defined in the Act who are
allowed to seek permission for setting up units does not include
'trusts'.
Currently, the definition of 'person' includes an
individual, whether resident in India or outside India, a Hindu undivided
family, co-operative society, a company, whether incorporated in India or
outside, a firm, proprietary concern, or an association of persons or body of
individuals, whether incorporated or not, local authority and any agency,
office or branch owned or controlled by such individual.
SEZs are major export hubs in the country as the
government provides several incentives and single-window clearance system.
The developers and units of these zones enjoy certain
fiscal and non-fiscal incentives such as no licence
requirement for import; full freedom for subcontracting; and no routine
examination by customs authorities of export/import cargo. They also enjoy
direct and indirect tax benefits.
Exports from SEZs grew about 15 per cent to Rs 5.52 lakh crore in 2017-18.
The Lok Sabha proceedings will
start from June 17 and Rajya Sabha from
June 20.