7 Developers Seek SEZ Cancelation: Govt to Decide

New Delhi, Nov 5 (PTI) As many as seven developers, including Kerala State Information Technology Infrastructure, have approached the government for full or partial cancelation of their special economic zones (SEZs).

The inter-ministerial Board of Approval (BoA) chaired by the Commerce Secretary would take a decision on these applications in its meeting on November 8.

Of the seven zones, four are from the IT/ITeS sector. While other sectors include apparel and pharma, according to the BoA meeting agenda document.

Kerala State Information Technology Infrastructure Limited (KSITIL) has sought denotification of its two IT/ITeS proposed zones in Kerala.

The developer has requested to de-notify the entire area of the two SEZs.

"As regards reasons, the developer has stated that due to lack of demand for SEZ space, their board has decided to transfer the land to the Industries Department for setting up an industrial park," the document said.

Arshiya Ltd has submitted an application for full de-notification of their FTWZ (free trade warehouse zone) at Nagpur, Maharashtra.

Qubix Business Park has asked for partial denotification of 1.47 Ha out of 10.17 Ha of their IT/ITeS SEZ at Rajiv Gandhi Infotech Park, Pune, Maharashtra.

The (Qubix) developer wishes to operate as a DTA (Domestic Tariff Area) without availing duty benefits and operate as an industrial IT park for non-SEZ clients," it said.

Similarly, Vikas Telecom has asked for partial denotification of 0.75 Ha out of 22.50 Ha of their IT/ITeS zone in Bengaluru.

As regards reasons for partial cancelation, the developer has proposed that the land has been lying vacant since long; demand for SEZ space has substantially decreased in the last few years; and implementation of a sunset clause for availing of Income Tax benefits, it added.

Zydus Infrastructure too has submitted a proposal for partial denotification of 22.91 Ha out of 114.77 Ha of their pharmaceutical SEZ at Ahmedabad.

"The developer has stated that the purpose of this partial denotification is that Zydus group of companies have intended to utilise these lands for establishment of a medical device park majorly for domestic tariff area market and also for the reasons that the developer is not receiving any query for setting up of units in their SEZ," the document said.

Further, the Gujarat Industrial Developer Corporation (GIDC) has sought partial de-notification of 15.65 Ha out of 20.41 Ha of their apparel park SEZ at Khokhra, Ahmedabad.

As per SEZ rules, the government on the recommendation of the BoA on the application made by the developer, if it is satisfied, modify, withdraw or rescind the notification of a SEZ.

Exports from special economic zones grew over 4 per cent to USD 163.7 billion in the last fiscal.

SEZs are key export hubs which contributed over one-third of the country's total outbound shipments in the last fiscal.

SEZs are enclosures that are treated as foreign territories for trade and customs duties, with restrictions on duty-free sales outside these zones in the domestic market.

As many as 423 such zones have been approved by the government, out of which 280 are operational as of March 31 this year. As many as 5,711 units are approved in these zones till December 31, 2023.

To give a push to these zones, the government is considering several measures such as a flexible framework for the sale of products manufactured in SEZs in the domestic market, and streamlining approval processes for units.

At present, units in SEZs are allowed to sell their products in DTA on payment of duties on an output basis (finished goods).

The maximum number of operational SEZs are in states, including Karnataka, Maharashtra, Telangana, Tamil Nadu, Andhra Pradesh, Gujarat, Kerala and Uttar Pradesh.