Hyperlinks to full text resources to

GOVERNMENT OF INDIA

SEZ ACT-2005, AMMENDMENTS,

&
NOTIFICATIONS AND CIRCULARS
Source: www.sezindia.nic.in/goi-policies.asp

Salient Features of the SEZ Act (2005)

The Special Economic Zones Act, 2005 was passed on the 23rd June, 2005, in an attempt
to give a framework to the implementation of SEZs in India. It includes several regulatory
and investment fostering mechanisms.

i. Creation of SEZs and general administration:

The Act explicitly mentions a few guiding principles for the Central Government regarding
the creation of SEZs. The objectives of the government, as stated by the Act, must be to
generate additional economic activity, promote exports of goods and services, create
employment opportunities, and develop infrastructure, all while maintaining the
sovereignty and integrity of India
(SEZ Act, 2005, p8). Thus, SEZs have thus come to be justified as an engine of growth and
employment generation, and not in terms of exports expansion alone (Sharma, 2009, p18).
The Act calls for the creation of the Board of Approval, which, as the name suggests, looks
into applications to set up SEZs and gives approval to them if they meet the required
criteria. This acts as a single-stop-shop for investors (called developers) to get the required
regulatory permission to set up an SEZ. SEZs may be established under this Act either
jointly or severally by the Central Government, State Government of any legal person. The
Central Government, however, can suo moto set up SEZs, and can prescribe other
requirements at a later stage (SEZ Act, 2005, p1-6).
The position of a Development Commissioner is established (p14), and this position is
responsible for the general overview of the SEZ, from presiding over the Approval
Committee (p17-18) to running the SEZ Authority, which is in charge of provision of
infrastructure, promoting exports. reviewing the functioning and performance of the SEZ,
and other such functions (p28-29).

ii. Tax Exemptions, Finance and Banking

By definition, SEZs are so-called tax havens. The Act specifies all those taxes and duties
that the developers would be exempted from in the SEZs. There is exemption from Custom
Tariff Act, 1975, Central Excise Act, 1944, Central Excise Tariff Act, 1985 and other similar
laws (p24). 100% Income Tax exemption on export income for the first 5 years, and 50%
for the next 5 years is offered (SEZ India, 2011a, Facilities and Incentives).
Attention is also given to the trade between the SEZ and the DTA. The Act (SEZ Act, 2005,
p8) prescribes the exemption from the payment of duties, taxes or cess under all
enactments of the First Schedule for trade between DTA to SEZ. However, any goods moved
from the SEZ to the DTA would be subject to safeguarding duties, anti-dumping regulations
and other instruments (p26).
The Act also specifies the financial governance structure of the SEZ. Bank branches in SEZs,
for example, are defined as Offshore Banking Units (SEZ Act, 2005, p3-4), and can be set
up after the approval of the Reserve Bank of India (RBI), which is Indias central bank
(p20). Other financial activities in the SEZ would be monitored by the relevant regulatory
authorities in the DTA (p21).

iii. Law Enforcement

Were illegal activities to take place, the Act states that the Development Commissioner
would have the cases investigated, and the cases would be heard at the court(s) appointed
by the State Government and the Chief Justice of the state High Court (SEZ Act, 2005,
p22). The Act also explicitly states that in case there is any inconsistency of this law with
other laws, than this Act would have an overriding effect over others (p34).

iv. Amendments
Over the years, several amendments have been made to the Act. They have primarily
revolved around specifying the provision of infrastructure and requirements for

establishment of SEZs. The minimum area requirements vary across industries and regions.
As an example, a multi-product SEZ has to be between 1000 and 5000 hectares, and at
least 50% of the area needs to be earmarked for developing the processing area (SEZ
India, 2010, ch II sec. 5, sub-sec 2 a).
Amendments also allow for the generation, transmission and distribution of power within an
SEZ (sec. 5, sub-sec 5 c). Importantly, in the case of an information technology related
SEZ, 24 hours of uninterrupted power supply is to be provided, apart from reliable
connectivity (sec. 5, sub-sec 5A).
Importantly, a stated objective is the generation of positive net foreign exchange earnings,
as it is specified that a unit would achieve positive net foreign exchange, calculated
cumulatively for a period of five years from production (ch VI sec 53).
The Act is clear in specifying the framework regarding the implementation of an SEZ
promotion strategy. The Act however, remains conspicuous in its silence on land acquisition
and labour laws, which has become the bone of contention on the implementation of the
policy.

By clicking the link, one can go though SEZ Rules incorporating amendments
up to July, 2010 - Link

Another good source for listing of all SEZ-related notifications -Link

(http://www.taxmanagementindia.com/visitor/Notifications.asp?Law=10&offset=20)

For SEZ related information pertaining to Andhra Pradesh, please

visit APSEZ (http://apsez.co.in/)

Hyperlinks to see online full text of

GOIs SEZ Act, Rules, amendments and circulars etc..

SEZ ACT
SEZ ACT, 2005
(www.sezindia.nic.in/writereaddata/pdf/SEZ%20Act,%202005.pdf)

SEZ Rules and Amendments (up to Sep. 13, 2013)

Implementation of the SEZ Amendment Rules, 2013 - Clarifications.

SEZ Amendment Rule, 2013 Gazette copy

SEZ Rules, 2006 with amendments upto July, 2010

SEZ Rules, 2010 Sixth Amendment G.S.R. 982.E.dated 16th December, 2010

SEZ Rules, 2010 Fifth Amendment G.S.R. 903.E.dated 10th November, 2010

SEZ Rules, 2010 Fourth Amendment G.S.R. 784.E.dated 28th September, 2010

SEZ Rules, 2010 Third Amendment G.S.R.732.E. dated 7th September, 2010

SEZ Rules, 2010 Second Amendment G.S.R.597 dated 12th July, 2010

SEZ Rules, 2010 Amendment G.S.R. 501.E. dated 14th June, 2010

SEZ Rules, 2009 Third Amendment S.O 562.E. dated 3rd August 2009

SEZ Rules, 2009 Second Amendment S.O 1293.E. dated 20th May 2009

SEZ Rules, 2006 with Amendments till May 2009

SEZ Rules, 2009 Amendment G.S.R.72.E. dated 3rd February 2009

SEZ Rules, 2008 Amendment G.S.R.2661.E. dated 14th November 2008

SEZ Rules, 2006 Third Amendment G.S.R.1744E dated 12th October 2007

SEZ Rules, 2006 Second Amendment S.O.393E dated 16th March 2007

SEZ Rules, 2006 Amendment G.S.R.470.E. dated 10th August 2006

Notification regarding setting up of Special Economic Zone Authorities

SEZ Authority Rules

Departments / Ministry list for Notification / Circulars

Ministry of Environment & Forests

Hazardous Wastes Management, Handling and Transboundary
Movement Third Amendment Rules, 2010

Ministry of Finance
RBI Circular allowing SEZ Developer to maintain EEFC
Account

Ministry of Commerce & Industry

Availability of lands in variours SEZs in India
Filling up of one post of Assistant Development Commissioner on absorption
basis in Moradabad SEZ under Department of Commerce.
Partial Modification on Policy to regulate functioning of Worn and Used cloting
units in SEZs
Recommendations of the Committee on Review and Revamp of EOU Scheme.
Policy to regulate functioning of Worn and Used clothing units in SEZ.
Policy on units in SEZs carrying on recycling on plastic scrap or waste.
Filling up of the post of DG, Export Promotion Council for EOUs&SEZs EPCES
under DOC, on deputation basis.
Special Secretary to the GOI the words Secretary, DOC of India shall be
substituted

Additional Secretary to the GOI the words Special Secretary to the GOI shall be
substituted
Filling up of the post of Director General, Export Promotion Council for EOU and
SEZ EPCES under DOC, on deputation basis.
Guidelines for Settting up Disaster Recovery DR and business Continuity Plans
BCP Centers for IT/ITES SEZs.
Cost recovery of the posts in newly notified SEZ under the SEZ Act 2005 reg.
Guidelines for Power Generation in Special Economic Zones dated 21st March,
2012
Cost Recovery of the posts in newly notified SEZs under the SEZ Act, 2005 - reg.
Handing of court cases and other litigation matters relating to SEZs instruction
regarding
Filling up of two posts of Dy. Development Commissioner in the O/o the DC, Falta
SEZ, Kolkata on deputation basis.
Filling up of two posts of Deputy Development Commissioner in the office of the
Development Commissioner, Falta SEZ, Kolkata on Deputation basis
Filling up of one post of Deputy Development Commissioner on Deputation basis
in the office of the Development Commissioner, Kandla SEZ, Kandla.
Timely submission of proposals for extension of deputation period of officers in
special Economic Zones
Filling up of one posts of Deputy Development Commissioner on Deputation
basis in the office of the Development Commissioner, Visakhapatnam SEZ, on
Visakhapatnam.
Filling up of one posts of Deputy Development Commissioner in the office of the
Development Commissioner, Cochin Special Economic Zone, on Deputation on
basis Cochin
Filling up to one post of Development Commissioner Special Economic Zone
Cochin under Department of Commerce by promotion/transfer on deputation
Filling up to one post of Deputy Development Commissioner on Deputation basis
in the Office of the Development Commissioner, Noida SEZ, Noida
Seeking comments on relaxation of conditions for Project Visa and Employment
Visa for SEZ.

Cost Recovery of the posts in newly notified SEZs under the SEZ Act, 2005 dated
16th September, 2010
Filling up of the post sanctioned for the SEZ Private notified under the
jurisdiction of DC, MEPZ SEZ 2 Posts of Stenographer Grade-III on deputation
basis
Filling up of the post sanctioned for the SEZ Private notified under the
jurisdiction of DC, MEPZ SEZ 1 Post of Stenographer Grade-I on deputation
basis.
Filling up of the post sanctioned for the SEZ Private notified under the
jurisdiction of DC, MEPZ SEZ 3 Posts of Asst. DC on deputation basis.
Filling up of the post sanctioned for the SEZ Private notified under the
jurisdiction of DC, MEPZ SEZ 2 Posts of Section Officer Accounts on deputation
basis under cost recovery basis.
Rescinding of notifications appointing Director STPI as Development
Commissioner of IT/ITES SEZs.
Consolidated guidelines /instructions issued on the staff management of
Government and Private Special Economic Zone W.e.f.16th August 2010
Exemption to SEZ Developers from obtaining distribution licence
Exemption to ATMs in SEZ from being treated as OBUs
Notification specifying acts or omissions punishable under FTDR Act, 1992 as
notified offences under Section 21 of SEZ Act, 2005
Notification authorising DCs of SEZs to be the Enforcement Officer for the
purpose of Section 21 of SEZ Act, 2005
Notification for operationalising sections 20, 21 and 22 of SEZ Act, 2005
Power Guidelines
Amendment in Notification Dated 27th October, 2006 on authorised operations
in SEZs
Notification on nomination in Approval Committee
Notification putting into force sections 31-41 of SEZ Act on SEZ Authority

Notification No. 1846 E Dated 27th October, 2006 on authorised operations in

SEZs

Instructions
2013

Instruction

19 Nov 2013

Uniform list of services to be followed in SEZ.

21 Oct 2013

Permission for sub-contracting by a SEZ Unit to a DTA Unit.

06 Aug 2013

Amendment to the Instruction No. 9 regarding procedure for

No. 79 Instruction
No. 78 Instruction
No. 77 -

Reimbursement of Duty DoD in lieu of drawback for supply of

goods to SEZ developers against Indian Rupees.

2011

76 -

22 Mar 2011

75 -

07 Feb 2011

Clarification on FTWZ issues.

Clarification on Rule 47-3 of SEZ Rules, 2006 Duty for sale of
power from SEZ to DTA

2010

74 -

31 Dec 2010

Amendment to the Instruction No. 69 containing guidelines to

regulate functioning of plastics/Used clothing units in SEZs

73 -

29 Dec 2010

Creation of Single Window Mechanism for granting various

statutory approvals under Environmental and Regulation.

72 -

03 Dec 2010

Clarification on execution of Bond-cum-legal Undertaking by the

SEZ Developer or SEZ unit in terms of rule 22 .1 .iv of the SEZ
Rules, 2006

71 -

12 Nov 2010

Clarification on Instruction No. 49 on FTWZ issues

70 -

09 Nov 2010

Clarification on various Policy and operational issues relating to

IT SEZs.

69 -

04 Nov 2010

Guidelines to regulate functioning plastics/Used clothing units in

SEZs

68 -

28 Oct 2010

Transfer of used Capital Goods by SEZ units

67 -

28 Oct 2010

Clarification on Rule 47-3 of SEZ Rules, 2006 Duty for sale of

power from SEZ to DTA

66 -

27 Oct 2010

Energy Conservation in SEZs

65 -

27 Oct 2010

Guidelines for Development of Special Economic Zones SEZs

64 -

11 Aug 2010

Role of Zonal DC

63 -

10 Aug 2010

Procedure regarding removal of goods to bonded warehouse

under Rule 46 13 of SEZ Rules, 2006

62 -

23 Jul 2010

Procedure for clearance of State SEZ Bills

61 -

14 Jul 2010

With drawal of Instruction No. 36,25,24&16

60 -

06 Jul 2010

Clarification on holding of Goods by units in FTWZ

59 -

18 Jun 2010

Requests for transfer of units from one SEZ to another SEZ

58 -

21 May 2010

Allowing of authorized employees of IT/ITES units in SEZ to

work from Home.

57 -

20 May 2010

Withdrawal of Instruction No. 34

56 -

07 May 2010

Withdrawal of Instruction No.45

55 -

05 May 2010

Allowing of authorised employees of IT/ITES units in SEZ to

work from Home

54 -

30 Apr 2010

Consolidated list of default authorized operations which can be

undertaken by the developer/approved co-developer by default
from the date of notification

53 -

29 Apr 2010

DCs to put up a mechanism in place in all SEZs so that exports

and import clearances take place all 7 days in a week.

52 -

20 Apr 2010

Clarification on broad- banding in IT/ITES Sector SEZ

51 -

25 Mar 2010

Declaration of Raw matereial components etc. imported by G& J

units in respect of goods to be manufactured by them

50 -

15 Mar 2010

Consolidated list of default authorized operations which can be

undertaken by the developer/approved co-developer by default
from the date of notification

49 -

12 Mar 2010

Clarifications on FTWZ issues

48 -

10 Mar 2010

Employment of washing process in the manufacture of

agglomerates etc from imported plastic waste and scrap

47 -

04 Mar 2010

Procurement, Import and Export of Prohibited and Restricted

Goods regarding

46 -

12 Jan 2010

Setting up of small scale units in Central Government SEZ

45 -

30 Nov 2009

Implementation of the provisions of the SEZ Act and SEZ Rules,

2009

2006
44 -

24 Nov 2009

Reports to be furnished by DCs for review/monitoring of

performance of SEZs

43 -

23 Nov 2009

Procedure for seeking clarification on policy issues relating to

SEZ Act and Rules from Department of Commerce.

42 -

18 Nov 2009

Guidelines for consideration of proposals for authorized

operations by the BoA.

41 -

13 Nov 2009

Clarification on calculation of NFE as per Rule 53 of the SEZ

Rules, 2006

40 -

01 Oct 2009

Effective implementation of the Hazardous Waste Rules, 2008

39 -

11 Sep 2009

Procedure for consideration of operational issues regarding

SEZs

38 -

11 Sep 2009

SEZ Online Project.

37 -

07 Sep 2009

Clarification on whether import, re-melt, re-make and export of

imported finished jewellery is an authorized activity in SEZ.

36 -

03 Sep 2009

Instructions regarding proposals to be considered by BOA

35 -

04 Sep 2009

Consolidated list of default authorized operations which can be

undertaken by the developer/approved co-developer by default
from the date of notification-Reg.

34 -

31 Aug 2009

Implementation of the Provisions of the SEZ Act,2005 & SEZ

Rules,2006

33 -

20 Aug 2009

Timebound disposal of various categories of applications

32 -

17 Aug 2009

Clearance of used capital goods into Domestic Tariff Area

regarding
31 -

17 Aug 2009

Requirement of lease agreement when Developer/Co-Developer

and unit are the same-clarification-reg.

30 -

03 Aug 2009

Norms for building infrastructure in the non-processing area of

SEZs

29 -

18 Aug 2009

Guidelines regarding land acquisition for SEZs

27 -

18 Aug 2009

Guidelines regarding "Conditions for relaxation of contiguity

criteria in respect of SEZs"

26 -

26 Feb 2009

Administrative structure and process of clearing cargo in ports in

SEZs

25 -

16 Jul 2009

Guidelines regarding putting up of a boundary wall

24 -

16 Jul 2009

Guidelines for dealing with Requests for change in area of SEZs

23 -

16 Jul 2009

Guidelines regarding Proposal for FDIs

22 -

16 Jul 2009

Guidelines regarding Grant of Extension of Validity of inprinciple approvals

21 -

16 Jul 2009

Guidelines regarding Transfer of In-principle or Formal

approval issued to a SEZ Developer to its subsidiary or SPV

2008

20 -

22 Aug 2008

Default authorized operations

19 -

10 Jul 2009

DEPB claims.

18 -

26 Feb 2009

Guidelines regarding the transactions related to SEZs

2009

consequent upon Amendment to Section 3 of the Indian Stamp

Act 1899 through Section 57 of the SEZ Act, 2005.
17 -

18 Jun 2009

Handing over charge of IT/ITES SEZ to the concerned Director,

STPI.

16 -

11 Jun 2009

Validity of Formal Approval

15 -

11 Jun 2009

Reimbursement of duty in lieu of drawback for supply of goods to

SEZ Developers against Indian Rupees.

14 -

03 Jun 2009

Single Window Mechanism Instructions thereon.

13 -

03 Jun 2009

Clarification on Lease of space on shift basis in IT/ITES SEZ &

Disaster Management/ Recovery Centre

12 -

01 Jun 2009

Clarification on applicability of Narcotics Drug and Psychotropic

Substances Act

11 -

12 Aug 2009

Procurement of used capital goods from DTA by SEZ Units.

10 -

25 May 2009

Clarification on Rule 49(4)(b) of SEZ Rules, 2006 removal of

used packing materials

9-

18 Feb 2009

Procedure for Reimbursement of Duty (RoD) in lieu of drawback

for supply of goods to SEZ Developers against Indian Rupees

2007

8-

12 Oct 2007

Amendment to SEZ Rules, 2006Units proposing to procure

Second Hand Capital Goods

2006

7-

14 Nov 2006

Setting up of new trading units in the Special Economic Zones Reg.

6-

03 Aug 2006

Implementation of the provisions of the SEZ Act, 2005 & SEZ

Rules, 2006

5-

31 May 2006

Setting up of new trading units in the Special Economic Zones

4-

24 May 2006

Modification in Instruction No. 1/2006 dated 24th March, 2006

of the Department of Commerce regarding setting up of trading
units in the Special Economic Zones

3-

24 Mar 2006

Letter of Approval to SEZ units Authorized operations Clarifications

2-

24 Mar 2006

Execution of Bound-cum-Legal Undertaking by SEZ

Developers/Units under SEZ Rules, 2006 Clarification

1-

24 Mar 2006

Approval for setting up of trading units in Special Economic

Zones