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TMI BlogSpecial Economic Zone SchemeX X X X Extracts X X X X X X X X Extracts X X X X ..... by them for export production or in connection therewith. Even the goods appearing in the restricted list of the EXIM Policy (1997-2002) are permitted to be imported. However, the goods prohibited for import are not permitted. The Scheme also allows duty free import of goods including capital goods on loan basis. 4. As per the EXIM Policy, the SEZ unit has to be a positive net foreign exchange earner. Net Foreign Exchange Earning (NFE) is calculated cumulatively for a period of five years from the commencement of commercial production according to a prescribed formula. 5. The Special Economic Zones can be set up in the country in the public, private, joint sector or by the State Governments. The minimum size of the Special Economic Zone, however, shall not be less than 1000 hectares. This measure is intended to provide self-contained areas supported by world-class infrastructure oriented towards export production. 6. In pursuance of the policy, four existing Export Processing Zones (EPZ) have been converted into Special Economic Zones w.e.f. 1-11-2000. These Special Economic Zones are: (i) SEEPZ Special Economic Zone, Mumbai; (ii) Kandla Special Economic Zone, Kandla ; (iii) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is given after verifying the marks and numbers on the packages only. 11. When the import consignments are required to be transhipped to a SEZ located at a station away from the place of import, the same is allowed under normal transit procedure. The unit files the Bill of Entry with the Assistant Commissioner/ Deputy Commissioner of Customs in-charge of the SEZ on the basis of the transit document. 12. In case of exports, the Shipping Bill alongwith relevant documents is filed with the Customs authorities in the Zone. As in the case of imports, the SEZ export cargo is not examined in routine and export is allowed on the basis of self-certification by the units. The units, after self-examination of the consignments, are required to submit the shipping bills to the Assistant Commissioner/Deputy Commissioner of Customs for "let export" order. After obtaining the "let export" endorsement on the shipping bill, the consignment is taken to the gateway port for export. At the gateway port also, the SEZ export consignment is not examined in routine. However, whether at the Zone or at gateway port or during transit of such cargo, the Customs authorities can examine the consignments when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess necessary for manufacture of final product. For this purpose, the unit is required to execute a bond with the Assistant Commissioner/ Deputy Commissioner of Customs. On receipt of the goods back in the SEZ unit, the bond gets discharged. In case of failure of the unit to bring back the goods within the prescribed period, the unit is liable to pay applicable duty on such goods. Removal of Goods into Another EOU/EPZ/EHTP/STP/SEZ Unit: 18. The SEZ units are allowed to clear the goods to another EOU/EPZ/EHTP/STP/SEZ unit without payment of duty for repairs, processing, testing or display on the basis of permission given by the Assistant or Deputy Commissioner of Customs. In these cases, the goods are required to be returned to the unit within the period specified in this behalf. Goods may also be sent to EOU/EHTP/STP/EPZ/SEZ units for the purposes of manufacture and export therefrom subject to maintenance of proper accounts by both the receiving and supplying units. For the above purposes, the unit is required to execute a bond with the Assistant Commissioner/Deputy Commissioner of Customs. The bond is discharged on receipt of the goods back in the SEZ or after they have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 days; (iv) Removal of parts & tools of machine temporarily without payment of duty for the purpose of repair and return thereof. (v) Taking out gem and jewellery manufactured in the SEZ to the retail outlets or showrooms set up in the departure lounge at international airports for sale to a tourist, as defined in the Baggage Rules, 1998, leaving India. (vi) Sale of gem and jewellery manufactured in the SEZ to a foreign-bound passenger and transferring the same to the retail outlets or showrooms set up in the departure lounge or Customs warehouse at international airports for being handed over to the said passenger for the purpose of export. (vii) Removal of moulds, tools, patterns, and drawings into the DTA for jobwork without payment of duty and to be returned to the unit thereafter. For availing of the above mentioned facilities, prior permission of Assistant Commissioner / Deputy Commissioner is required. 21. In case of gem & jewellery units, scrap, dust or sweepings generated in the unit is allowed to be forwarded to the Government Mint or Private Mint for conversion into standard gold bars and return thereof to the Zone subject to the observance of procedure laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable under provisions of Chapter V of Finance Act, 1994, then rendering of such services in DTA would require payment of service tax as per the provisions of Finance Act, 1994. Levy of Central Excise Duty on Goods Produced or Manufactured by SEZ Units and Cleared into Domestic Tariff Area : 25. In terms of section 3 of the Central Excise Act, 1944, the excise duty leviable on goods manufactured in an SEZ unit and cleared into Domestic Tariff Area is an amount equal to the customs duty leviable under section 12 of the Customs Act, 1962 or under any other law for the time being in force on like goods produced or manufactured outside India, if imported into India. Thus, the duty is worked out exactly in the same manner as applicable to imported goods. Valuation of Goods Cleared into DTA: 26. Under the SEZ Scheme, the goods cleared from the Zone are treated as imported goods. Therefore, in case of DTA clearances, though the duty charged is central excise duty, this duty is taken as equal to the aggregate of all duties of customs. In other words, the SEZ units are required to pay full customs duty (applied duty) on their DTA clearances. In view of this, in case of sale/clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment Commissioner. Such de-bonding is subject to penalty, if any, that may be imposed and payment of duties of customs and excise applicable at the time of de-bonding. The standard conditions of de-bonding, as indicated in the Handbook of Procedures provide, amongst other conditions, that the applicable customs and central excise duty would be paid on imported and indigenous capital goods, finished goods, raw materials, consumables, components etc. in stock. Further, the unit in question continues to be treated as a SEZ unit till the date of final de-bonding order. 31. The duty payable in terms of the relevant notifications is as under: (a) Semi-finished and finished goods lying in stock at the time of de-bonding can be cleared on payment of the excise duty equal to aggregate duties of Customs payable on similar imported goods. (b) Capital goods, material handling equipment, office equipment and captive power plants can be cleared on payment of an amount equal to the customs duty leviable on such goods on the depreciated value thereof and at the rates in force on the date of payment of such duty. (c) Goods including containers suitable for repeated use other than those at (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1962. The Assistant Commissioner/Deputy Commissioner may keep a watch on the export performance of the units and in the event of non-achievement of positive NFE within the stipulated period, action can be taken against the units for recovery of the duty and interest. So far as utilization of imported/indigenously procured goods is concerned, the same may be utilized within the period of five years. In case of failure to utilize the imported / indigenously procured goods within the period of five years, the unit is liable to pay duty on the said unutilized goods along with the interest at the rate of 24% per annum from the date of importation or procurement of the said unutilized goods till the date of payment of such duty. Transitional arrangements: 36. In case of conversion of existing Export Processing Zone into Special Economic Zone, an existing EPZ unit can opt for SEZ scheme. On conversion, its previous obligations as an EPZ unit are subsumed by its obligations under the SEZ scheme. The raw materials, components, consumables and finished goods lying in stock with the unit at the time of conversion are taken as its opening balance under the SEZ scheme. All un-ut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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