Gujarat: Good news for units working in Special Economic Zone, permission to sell products in domestic market

Another law to replace the Special Economic Zone: SEZ units will also be allowed to supply raw materials to local producers on sub-contracts, through the new proposed draft, arrangements can be made to supply raw materials for contract manufacturing.

The central government unveiled a specially proposed draft bill to allow units operating in special economic zones to sell their products in the domestic market. For that SEZ units will have to make arrangements for payment of outstanding import duty on the raw material used in the finished goods as per the provision made in section 51. The plan is to make arrangements for units outside SEZs to supply their raw materials for contract manufacturing through the new proposed draft.

At present, as per the applicable legal provisions, those who sell goods for export outside the SEZ, i.e. in the domestic tariff area, are compelled to pay the customs duty. Also, the new law exempts outsourcing manufacturing operations to SEZs on sub-contract, subject to certain conditions. Legal expert Manish Jain said that exemption will be given only if the cost of production in its own unit is not increased in addition to the cost of production in a unit. Manufacturing or manufacturing operations cannot be outsourced to other external units that exceed the cost incurred by the manufacturer in 2022 to produce in 2021.

However, the rules will be announced later. Further clarification on the issue will emerge only after the rules are made public. However, the intention of the government is to make the new SEZ scheme more attractive for the country. This plan has been prepared keeping in mind all the rules of the World Trade Organization. Of these, the rules of net foreign exchange have been removed.

The Union Government today unveiled a proposed draft to bring in a new amended SEZ Act as an Enterprise and Services Hub – Development of the Country with a view to amending the law relating to Special Economic Zones. Also, the Bill seeks to establish a mechanism to ensure true single window clearance and to provide for timely clearance of all types of units and setting up of new units in a time bound manner. Along with this, the intention to introduce a single form filling and return system for all the processes of setting up a new industrial unit has also been expressed through this proposed draft. A separate online portal will be launched for the development of Enterprise and Service Hub. This portal will be a medium of single window clearance. With this, arrangements will be made to get all the approvals within the stipulated time frame.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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