Slew of changes to SEZ Act likely in Winter Session

THE GOVERNMENT IS planning to bring a few amendments to the Special Economic Zones (SEZ) Act, 2005 in the winter session of Parliament, with a view to giving more operational flexibility to units in these tax-free enclaves, especially when it comes to sales in the domestic tariff area.

- MUKESH JAGOTA

• DESH BILL HANGS IN BALANCE

These amendments are being taken up even as the Development of Enterprise and Service Hubs Bill (DESH), which is meant for an overhaul of the SEZ regime, is facing delays after the finance ministry cited huge revenue implications.

According to an official source, a key demand from SEZs is to treat sales by SEZ units in the domestic market akin to imports from countries with which India operates bilateral free trade agreements (FTAS). Imports from FTA countries are subject to concessional/nil import tariffs.

"The amendments proposed in the current SEZ Act will enable some of the changes in the legislative provisions governing these zones that were earlier proposed to be done through the DESH Bill," the official who did not wish to be identified, said.

Currently, sales from SEZs to DTAs are subject to the buyer paying the basic customs duty (import tariff) and Integrated Goods and Services Tax (IGST) applicable on the product concerned. Other levies on imports like anti-dumping, countervailing and safeguard duties (under the Customs Tariff Act, 1975) comes into play wherever applicable.