FAQs for Setting Up of SEZ Unit
1. What is an SEZ?
Ans. A specially demarcated, duty-free area notified/declared by the Government which is treated as foreign territory for customs purposes.
2. What is an SEZ Unit?
Ans. A unit set up by an entrepreneur in a Special Economic Zone.
3. Who can set up a Unit?
Ans. Any individual entrepreneurs, domestic entity, foreign company or joint venture entity may set up a Unit in SEZ.
4. Is 100% FDI permitted?
Ans. Yes. 100% FDI is permitted through automatic route barring such sectors which are restricted/prohibited by Govt. Of India.
5. Is there any minimum investment required to set up a Unit in SEZ?
Ans. No specific minimum investment is prescribed under the SEZ Rules.
6. Can a foreign company establish an SEZ unit in India?
Ans. Yes. Foreign companies may establish SEZ units subject to the prevailing FDI policy and other applicable laws.
7. Who should be contacted for assistance?
Ans. The Office of the Development Commissioner, Falta Special Economic Zone, Nizam Palace, 4th Floor, 234/4 AJC Bose Road, Kolkata-700020, may be contacted for any assistance.
8. Is there any minimum area requirement for setting up an SEZ unit?
Ans. No. There is no minimum area requirement prescribed under the SEZ Act, 2005 and SEZ Rules 2006 for setting up an SEZ Unit.
Application & Approval Process
9. How to apply for setting up a Unit in FSEZ?
Ans. Application in Form-F of SEZ Rules 2006 may be submitted through SEZ online to the DC, FSEZ.
10. What is the application fee for filing an application for setting up a Unit in SEZ?
Ans. Rs.5000 is the application fee to be paid through the ‘Bharat Kosh’ Portal.
11. What is Letter of Approval (LOA)?
Ans. LOA is a permission letter issued by the O/o the Development Commissioner for setting up a Unit.
Incentives & Fiscal Benefits
12. Are imports in SEZ duty free?
Ans. Yes, zero customs duty applies to Capital Goods, Raw Material and Components used for the purpose of authorized operations.
13. Is GST applicable for items procure from Domestic Tariff Area (DTA)?
Ans. Procurement from the Domestic Tariff Area (DTA) is zero-rated under GST law.
Operational Compliance & Obligation
14. Is export compulsory for an SEZ Unit?
Ans. Yes. SEZ units are primarily established for exports and are required to achieve positive Net Foreign Exchange (NFE) over a five-years block.
15. What is a Bond-cum-Legal Undertaking (BLUT)?
Ans. A BLUT is an Undertaking required to be submitted by a Unit for ensuring duty-free goods are properly utilized for authorized operations.
Set Up & Infrastructure
16. How land/space can be hired by a Unit in SEZ?
Ans. Developer can allot land/built up shed for setting up a unit to the eligible applicants.
FAQs for Setting Up of SEZ
1. What is a Special Economic Zone (SEZ)?
Ans. A specially demarcated, duty-free area notified/declared by the Government which is treated as foreign territory for customs purposes.
2. What is an SEZ Developer?
Ans. An SEZ Developer is a person, company, State Government, or Statutory Authority approved by the Government of India to establish, develop, operate and maintain a SEZ under the SEZ Act, 2005.
3. Who can become an SEZ Developer?
Ans. A Central/State Government, Public Sector Undertaking, Private Company, Joint Venture, Partnership Firm or any other eligible entity may become an SEZ Developer, subject to approval by the Board of Approval (BoA).
4. What is the role of an SEZ Developer?
Ans. The Developer is responsible for creating, operating and maintaining infrastructure and providing facilities required for the functioning of the SEZ.
5. Which authority grants approval for setting up an SEZ?
Ans. The BoA, Department of Commerce, Government of India, grants approval for setting up an SEZ.
6. How to apply to establish an SEZ?
Ans. A proposal may be submitted in the prescribed application format (Form-A) under the SEZ Act 2005 & SEZ Rules 2006 to the Department of Commerce (DoC) /through the concerned jurisdictional Development Commissioner along with the recommendation of the concerned State Government.
7. What are the minimum area of land required to set up an SEZ?
Ans.
| Sl. No. | Sector | Minimum contiguous land requirement |
|---|---|---|
| 1 | Manufacturing & Other Sectors |
50 Hectares (For all states except Goa, UT,
NE/Hilly States) 25 Hectares (Goa, UT, NE States/Hilly States) |
| 2 | IT/ITES |
No minimum land requirement. Built up area required: 50,000 sq.mtr for Category A cities. 25,000 sq.mtr. for Category B cities. 15,000 sq.mtr. for Category C cities. *As per Annexure IV A of the SEZ Rules 2006 |
| 3 | Semiconductor & Electronic Component Manufacturing | 10 Hectares |
8. Is land acquisition mandatory before applying?
Ans. The applicant should have possession of the required contiguous land or demonstrated legal rights over it as prescribed under the Rules.
9. Are tax benefits available to SEZ Developers?
Ans. Yes. Developer may import or procure Goods and services from the Domestic Tariff Area, without payment of duty, taxes and cess for the authorized operations.
10. Is foreign investment permitted in SEZ development?
Ans. Yes. 100% Foreign Direct Investment (FDI) is permitted through automatic route in SEZ development.
11. Can the Developer lease land to SEZ Units?
Ans. Yes. The Developer may allot land or built-up space to approved SEZ Units in accordance with the SEZ Act & Rules and the approved lease policy.
12. Can additional land be added to or a land portion be removed from a notified SEZ subsequently?
Ans. Yes. It can be done with the approval of the Board of Approval (BoA).