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Unit 13: Special Economic Zones

For setting up SEZ, the interested party has to fill up an application with the name, address, and Notes
status of the developer and co-developer. The developer is also required to submit a project
report with details about the proposed location of SEZs, details of infrastructure that already
exists, details of infrastructure that will be established, and the total area of the proposed SEZ.
The project report of the proposed SEZ that will be submitted along with the application form
should also contain investment details, which would include the financing mode and the project’s
viability. It should also contain details as to whether the proposed SEZ would be a multi-
product or specific industries zone and foreign equity details. The application, along with the
project report for the setting up of an SEZ unit, is submitted to the Chief Secretary of the State.

Table 13.4 Approval Procedure of Setting up an SEZ in India

Proposal by person Proposal may also be made directly to the
Form-A
intending to set up board; after approval by the board, the person
SEZ to the concerned will require to obtain state government
First Step state government concurrence within a period of 6 months.
The state government Within 45 days; the state government to
Second Step forwards the proposal ensure that requirements of minimum land
area, and the exemption of taxes at state
along with its
recommendations to level, delegation of powers to DC as
the board recommended are made available to
Third Step developer and units
Approval or refusal by The board may approve the proposal with or
board without modifications, or reject it. In practice,
the board accords in-principal approval
pending land acquisition in Form B-1
Form-B Issuance of letter of Within 30 days of receipt of BOA
approval by the recommendation; LOA will incorporate any
Government of India additional conditions imposed by the board it
its recommendation. LOA validity is for 3
years, during which time the developer shall
take effective steps to implement the approved
proposal.

The state government in turn forwards the application to the Board of Approval, Department of
Commerce, and Government of India. State governments have to give their commitment that
the area where the proposed SEZ will be set up is free from all kinds of environmental restrictions
and it would provide electricity, water, and various other services when required, and that it
would allow transmission, generation, and power distribution inside the SEZ along with the
application. Further, the state government has to give the commitment that it would exempt the
proposed SEZ from sales tax, turnover tax, and Mandi tax on the goods supplied from the area of
domestic tariff to the units in the SEZ. Also, the government of the state has to give the commitment
that it would declare the units of the SEZ as public utility service and that the system of single
point clearance and minimum inspection would be provided to the SEZs. The Board of Approval
will consider such application forwarded to it by state governments and will issue a permission
letter or refusal note to the developer of SEZ and also inform the state government.
Table 13.5: Who’s Who in SEZ Approval Committee (BOA)

Contd...

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