Easier domestic sales, exit for SEZs under new Bill

Long-pending Bill likely to be tabled in monsoon session

- MUKESH JAGOTA

THE MODI GOVERNMENT is likely to include a fresh set of support measures for the special economic zones (SEZs) in the first 100-day agenda for its expected third term.

The new steps would include further easing of rules for domestic sales by manufacturing units in these tax-free enclaves primarily set up to promote exports to the domestic tariff area (DTA).An easier exit route for SEZ developers and units and faster approvals are also part of the package, according to official sources.

A long-pending Bill that seeks to amend the SEZ Act 2005 is being given final touches by the commerce ministry, and this would be tabled in the first (monsoon) session of Parliament by the Modi 3.0 government, the sources added.

Though SEZs have asked for their domestic tariff area sales to be treated on a par with imports from countries with which India has bilateral free trade agreements (FTAS) FTA imports are subject to minimal/zero tariffs the sources said the government isn't inclined to allow this. This would deny a level-playing field to producers in DTA, they added.

More support to SEZs have been necessitated as exports from these units have trailed targets, even as the tax concessions are to end for these units over the next few years. The amendments to the Act were earlier expected to come in the winter session last year but were postponed.