Question : INCENTIVES FACILITIES TO SPECIAL ECONOMIC ZONES

(a) the details of Special Economic Zones (SEZs) in the country, State/UTwise along with incentives and facilities offered by the Government to the units in SEZs;

(b) the benefits/contribution of SEZs in country`s economy, employment generation and export;

(c) whether the Government proposes to expand tax relief for the SEZs and if so, the details thereof;

(d) whether any shortcomings have been reported/noticed in the current SEZ policy;

(e) if so, the details thereof; and

(f) the measures taken/proposed to be taken by the Government to review/revamp the currrent SEZ policy to remove the shortcomings therein?

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

(a): In addition to Seven Central Government Special Economic Zones (SEZs) and 11 State/ Private Sector SEZs set-up prior to the enactment of the SEZ Act, 2005, formal approval has been accorded to 565 proposals out of which 388 SEZs have been notified. Presently, a total of 185 SEZs are exporting. A list showing State-wise distribution of formally approved, notified and operational SEZs is at Annexure. The fiscal concessions and duty benefits allowed to Special Economic Zones (SEZs) are inbuilt into the SEZs Act, 2005 and Rules thereunder. These exemptions are uniformly applicable to all SEZs and are in the nature of incentives for export and are consistent with the principles that guide export promotion initiatives of the Government in general. The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs are as under:-

1. Duty free import/domestic procurement of goods for development, operation and maintenance of SEZs and SEZ units

2. 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.

3. Exemption from Central Sales Tax.

4. Exemption from Service Tax.

5. Exemption from State sales tax and other levies as extended by the respective State Governments.

(b): The contribution of SEZ exports to overall country’s exports and employment generated in SEZs during the last three years are as under:

 Financial	Total Exports of	Total SEZ	% share of SEZ	Employment Year(s)	the Country##	Exports	exports in the	in SEZs#	(Rs. Crore)	(Rs. Crore)	total exports of	the country 2011-2012	14,65,959	3,64,478	24.86	8,44,916 2012-2013	16,35,261	4,76,159	29.12	10,74,904 2013-2014	18,92,892	4,94,077	26.10	12,83,309 # calculated on cumulative basis. ## Data source: DGCIS, Kolkata.