MINISTER OF COMMERCE AND INDUSTRY (SHRI KAMAL NATH)
(a): Manufacturing units in Special Economic Zones (SEZs) need to be positive foreign exchange earners. Major incentives and facilities offered to these units include duty free import/procurement of goods , exemption from Central sales tax on supplies from domestic tariff area, exemption from service tax, 100% income tax exemption on export profits for 5 years, 50% for 2 years and not exceeding 50% of profits ploughed back, for next 3 years.
(b) to (g): A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (b) TO (g) OF LOK SABHA STARRED QUESTION NO. 529 FOR ANSWER ON 3.5.2005 REGARDING SPECIAL ECONOMIC ZONE.
(b): Manufacturing units established in the SEZs during the last 3 years broadly fall under the product groups of electronics, engineering goods, gems and jewellery, textiles and garments, pharmaceuticals, chemicals and agro-products.
(c): Rendering of services by SEZ units to another SEZ unit, Export Oriented Units, units in Electronics Hardware Technology Parks, Software Technology Parks and Bio-Technology Parks have also been made eligible for counting towards fulfillment of positive net foreign exchange earnings.
(d): Approval has so far been given for setting up of 10 SEZs in the private/joint sector or by the State Governments or its agencies after the announcement of the Foreign Trade Policy in August, 2004.
(e): No inflow of FDI for setting up of approved SEZs in the private/joint /State sector has been reported so far.
(f) & (g): A proposal for introduction of a Special Economic Zone Bill in the Parliament is under the consideration of the Government. The proposed legislation is expected to provide a stable and transparent policy regime covering all aspects of establishment, operation and fiscal regime for SEZs.
