APPENDIX - 16I

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GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE

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GUIDELINES FOR SETTING UP SPECIAL ECONOMIC ZONES IN THE PUBLIC/PRIVATE/ JOINT SECTOR OR BY THE STATE GOVERNMENT

With a view to augmenting infrastructural facilities for export production it has been decided to permit the setting up of Special Economic Zone (SEZ) in the public, private, Joint sector or by State Governments.. The following guidelines will apply to such proposals:

1. SEZ can be developed and managed in the private sector or jointly by State Government and a private agency or exclusively by the State Government or their agencies. In the case of privately developed zones, the investors could be either Indian individuals, NRIs, Indian or foreign companies.
   
   
2. Proposals for setting up SEZ in the public/private/joint/State sector are required to meet the following conditions:
   
   
   1. Minimum size of the SEZ shall not be less than 1000 hectares. This would however, not apply to existing EPZs converting into SEZs or to product specific SEZs.
      
      
   2. The SEZ and units therein will abide by local laws, rules, regulations or bye-laws in regard to area planning, sewerage disposal, pollution control and the like. They shall also comply with industrial and labour laws and such other laws/rules and regulations as may be locally applicable.
      
      
   3. Such SEZ shall make security arrangements to fulfill all the requirements of the laws, rules and procedures applicable to such SEZ..
      
      
   4. Only units approved under the SEZ Scheme would be permitted to be located in these SEZ.
   
   
   
3. Procedure for approval:
   
   
   1. Proposal for establishing public/private/joint/State sector SEZ will be considered by an Inter-ministerial Committee set up in the Department of Commerce for this purpose.
      
      
   2. Applications (10 copies) indicating the name and address of the applicant, status of the promoter (whether individual/private company/State Government/NRIs etc.) along with a project report covering the following particulars may be submitted to the Chief Secretary of the State:
   
   
   
   1. Location of the proposed zone with details of existing infrastructure and that proposed to be established,
      
      
   2. Its area distance from the nearest Sea Port/Airport/Rail/Road head etc.
      
      
   3. Financial details including investment proposed, mode of financing the project and viability of the projects.
      
      
   4. Details of foreign equity and repatriation of dividends etc., if any.
      
      
   5. Whether the zone will allow only certain specific industries or will be a multi-product zone.

1. The State Government shall, forward it alongwith their commitment to the following, to the Department of Commerce, Government of India:
   
   
   1. The area incorporated in the proposed Special Economic Zone is free from environmental restrictions;
      
      
   2. Water, Electricity and other services would be provided as required;
      
      
   3. Full exemption in electricity duty and tax on sale of electricity for self generated and purchased power;
      
      
   4. To allow generation, transmission and distribution of power within SEZ;
      
      
   5. Exemption from State Sales Tax, octroi, mandi tax, turnover tax and taxes, duty, Cess, levies on supply of goods from Domestic Tariff Area to SEZ units;
      
      
   6. For units inside the Zone, the powers under the Industrial Disputes Act and other related Acts would be delegated to the Development Commissioner or to an officer of the State Government posted exclusively for the Zone and the Zone will be declared as a public utility service under Industrial Disputes Act.
      
      
   7. Single point clearances system and minimum inspections requirement under State Laws/Rules.
   
   
   Thereafter, the proposal incorporating the commitments of the State Government will be placed before the Inter-Ministerial Committee on public/private/joint/State sector SEZ for consideration.
   
   
2. On acceptance of the proposal, a Letter of Permission will be issued to the applicant. The approval will be subject to cancellation in the event of any abuse or violation of the conditions of approval.
   
   
3. RBI guidelines on real estate ownership/development by NRI and Foreign/Indian companies, will also apply to the establishment of these SEZ.