Clarifications
on Operational Issues to IT SEZs Policy
Subject:
clarification on various Policy and operational issues relating to IT SEZs.
[Ref: SEZ
Notification 70-SEZ/09.11.2010]
Please find
enclosed a copy of clarifications/ decisions taken in a meeting chaired by AS(DKM) about various policy and operational issues
concerning IT SEZs, for compliance.
Minutes of the meeting held on
2.11.2010 at 1230 Hrs with STPI Directors regarding issues relating to IT SEZs
A
meeting was held under the Chairmanship of Shri D.K. Mittal, Additional Secretary with STPI Directors to discuss
the various policy and operational issues relating to IT SEZs.
A brief record of the discussion held and decisions taken has been summed up below:-
1. Shifting of units to SEZ
(i) The provisions of SEZ Act, 2005 and Rules framed there under
do not prohibit transfer of used capital goods or businesses from existing DTA
or STPI unit to SEZ. The only deterrent for transfer of such capital goods or
businesses is not getting the exemption under Income Tax Act when the value of
used capital goods exceeds the 20% of the total capital goods and in respect of
businesses no exemption can be availed while the Development Commissioners will
be intimated about the transfer of goods/businesses, the final decision
regarding the IT exemption will lie with the Income Tax Department. The ratio
80:20 of new/used capital goods shall be reckoned on the date the unit starts
to produce goods or services.
(ii) There is no limitation on the transfer of
manpower to the SEZ units.
(iii) In respect of the IT companies which operate
Master Contracts and which have units in STPIs and DTA etc. and which farm out
the subcontract to their various units, they must have an individual and
distinct sub-contract in respect of each of its SEZ Units.
(iv) The
spirit of the SEZ Act & Rules is that the investment for infrastructure
development in the SEZ has to be new. The transfer of used goods/business is
only with respect to the SEZ Units.
2. DTA sale by IT SEZ Unit
In
the SEZ scheme, there is neither an export obligation on a unit nor there is
ban on DTA sale. However, they must achieve NFE positive earnings within five
years of the commencement of the commercial operations failing which action may
be taken as per the provisions of relevant rules and instructions.
3. Shifting of Unit from one SEZ to
another
Instructions
in this regard have already been issued vide letter No. C-4/2/2010-SEZ dated
18.6.2010 (Instruction No. 59) which provides that there is no objection
in-principle to the shifting the unit from one SEZ to another. However, all
such proposals are required to be placed before the Board of Approval for its
consideration.
4. Broad banding of IT/ITES SEZs to
include Hardware also
While
the Letter of Approval being issued to IT/ITES SEZs has been broad banded to
include electronic hardware also and further manufacturing/assembling of,
electronic equipments must also be allowed in such SEZs. Further Hardware units
may require production of components and the same must be allowed.
5. Testing laboratory for tyres in IT SEZ set up by L&T
It
was decided that setting up of a unit for testing of tyres
in an IT SEZs may not be allowed as the process may involve setting up separate
facility totally unrelated to IT and would require measures to check pollution
also. Therefore, they may be asked to undertake the physical testing activity
outside the SEZ while the test data can be processed in the SEZ unit.
6. SEZ online project
About
the SEZ online software being developed by M/s. NSDL, it was stated that the
agency has agreed to post their one executive each with all the seven Zonal
DCs. Services of these executives can be utilised by
all DCs including STPI Directors to address the day to day problems faced in
operating the software developed by M/s. NSDL. The suggestion of STPI Directors
to arrange hand holding for customs staff of the zone was also accepted.
F.
No. 12/4/2010-SEZ