There is no mandatory requirement of undertaking exports in the SEZ
legislation. For example, a unit which does not import any raw material
or capital goods will be under no obligation to export,” according to
the finance ministry.
The PAC report on action taken by the commerce
and finance ministries on observations made in its 24 February 2011
report on SEZs was presented in the Parliament on Thursday.
The committee had in an earlier report observed that out of overall exports of Rs. 7,149.23 crore made by 22 SEZ units, actual exports to countries outside India was only Rs.
1,999.27 crore, or 28%, and the remaining 72% were related to earnings
domestic tariff area (DTA), or area within India. The committee had
recommended restricting sale of goods by SEZs in domestic tariff area by
an appropriate scale for the purpose of calculating net foreign
exchange earnings in order to reduce the misuse of the scheme.
Vikram
Bapat, executive director at PricewaterhouseCoopers, India, said it is
difficult to fathom the unnecessary focus on exports from SEZ units.
“SEZ policy is not an export-oriented policy, it is an infrastructure
augmenting policy,” he said.
In its submission before the PAC, the
finance ministry said the value of inputs and services provided to SEZs
from the domestic tariff area against export obligations under export
promotion schemes be also considered as imports into SEZs.
The commerce ministry opposed the view, saying such a change will result in SEZ units importing goods from outside India.
Since
DTA units are eligible to import goods for the purpose of exports from
outside India, sourcing supplies from within India will save foreign
exchange outgo, the commerce ministry said.
The commerce ministry
also contested the finance ministry’s argument that SEZ units are put at
a substantial advantage over their DTA counterparts, saying that SEZ
units do not enjoy many schemes meant for DTA units such as Export
Promotion Capital Goods and Duty Entitlement Passbook scheme, among
others.
The PAC, however, rejected the commerce ministry’s view
that the present mechanism is sufficient for monitoring the proper
implementation of the SEZ policy.
It said that the government
needs to establish an effective and reliable oversight mechanism for
monitoring net foreign exchange earnings achievements for prompt
recovery of duty foregone and also to provide deterrent penal provision
for wilful default. At present, the SEZ scheme relies mainly on
self-certification of the SEZ units for net foreign exchange earnings.
So
far, 589 formal approvals have been granted for setting up of SEZs, out
of which 389 have been notified, according to the commerce ministry. As
on 31 March, more than
Rs. 2,01,874.76 crore has been invested in the SEZs directly employing 844,916 people
Soure : .livemint.co