The commerce department is seeking to amend the law governing special economic zones (SEZs), offering several concessions as it seeks to revive the enclaves to boost exports and activity within the economy, according to a TOI report.
At a meeting convened by commerce and industry minister Piyush Goyal on Monday, the plan discussed with exporters included allowing sales in the domestic tariff area (DTA) - which is the area outside the SEZ - on a duty forgone basis. Under the current regime, shipments from SEZs to an Indian seller in the DTA attract import duty equivalent to what any consignment from another country faces. If the amendments go through, in the case of, say, a shirt made in an SEZ using imported fabric, it will ..
Sources told TOI that the benefit is available in American foreign trade zones as well as comprehensive bonded zones in China, as well as some of the Indian schemes, such as those for export-oriented units.
"It will attract foreign investment in the Indian SEZs. One cannot have separate factories for serving domestic and export markets," an industry source said.
Similarly, the commerce department has introduced a "reverse job work" provision to utilise underused capacity in the zones, which have seen a decline since the UPA government rolled back several tax incentives first offered in 2005.
A third concern, which is sought to be addressed through the amendments, is to allow rupee payment for some of the services rendered by units in SEZs to the domestic tariff area. This will be applicable to services such as maintenance, repair, and operations (MRO) and space-Jrelated activities, sources said.
Source Name : Economic Times