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.

 

Govt Approves SEZ Amendment Bill to Replace Ordinance for Permitting Trusts to Set Up Units

The bill will replace the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March.

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.