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Setup sez


 Who can set up SEZs?
 How can one apply for setting up of SEZs?
 Are there any terms & conditions for setting up of SEZs?
 What is role of State Governments?
 What is the approval mechanism for the units? 
 What is the obligation of the Unit under the Scheme? 
 What is the procedure to obtain Single Window Clearance for setting up SEZs in Karnataka?



Who can set up SEZs?


Any private / public / joint sector or State Government or its agencies can set up Special Economic Zone (SEZ).


Can Foreign Companies set up SEZs?                                                                                                            




How can one apply for setting up of SEZs?


15 copies of application, indicating name and address of the applicant, status of the promoter along with a project report covering the following particulars may be submitted to the Chief Secretary of the State:


     Location of the proposed Zone with details of existing infrastructure or that proposed to be established
     Area, distance from the nearest seaport / airport / rail / road head etc.
     Financial details, including proposed investment, mode of financing & project viability.
     Details of foreign equity and repatriation of dividends etc., if any
     Whether the Zone allows only specific industries or will be a multi-product Zone.


The State Government shall forward it, along with their commitment on the following to the Department of Commerce, Government of India:


     Area incorporated in the proposed SEZ is free from environmental restrictions.
     Water, electricity and other services would be provided as required.

    Units would be given full exemption in electricity duty and tax on sale of electricity for self generated and purchased

     Allow generation, transmission and distribution of power within SEZ.
     Exempt from State sales tax, octroi, mandi tax, turnover tax and any other duty / cess or levies on the supply of goods 
        from Domestic Tariff Area to SEZ units.
     For units inside the Zone, the powers under the Industrial Disputes Act and other related labour Acts would be
        delegated to the Development Commissioner and that the units will be declared as a Public Utility Service under
        Industrial Disputes Act.
     Single point clearances system and minimum inspections requirement under State Laws / Rules would be provided.


The proposal incorporating the commitments of the State Government will be considered by an Inter-Ministerial Committee in the Department of Commerce. On acceptance of the proposal, a letter of permission will be issued to the applicant


Are there any terms & conditions for setting up of SEZs?                                                                          


     Only units approved under SEZ scheme would be permitted to be located here.
     SEZ units shall 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 as may be locally applicable.     
     SEZ shall make security arrangements to fulfill all the requirements of the applicable laws, rules and procedures.
     SEZ should have a minimum area of 1000 hectares and at least 25% of the area is to be earmarked for developing 
        industrial area for setting up of units.  
     Minimum area of 1000 hectares will not be applicable to product specific and port / airport based SEZ.
     The minimum area for sector specific SEZ viz, IT & ITES, Biotechnology, non-conventional energy, including solar 
        energy equipments / cell, or gem and jewellery sectors, shall be 25 acres and the minimum area for any other sector  
        specific SEZ or port or airport, shall be 250 acres, provided that at least 50% of the area is be earmarked for   
        developing processing area. 
     Wherever the SEZ are landlocked, an Inland Container Depot (ICD) will be an integral part of the SEZ.


Detailed guidelines on setting up of SEZ in the Private / Joint / State Sector are given in Appendix 14-II.N of Handbook of Procedures Volume I.


What is role of State Governments?


State Governments have a very important role to play in the establishment of SEZ. Representative of the State Government, who is a member of the Inter-Ministerial Committee on private SEZ, is consulted while considering the proposal. Before recommending any proposals to the Ministry of Commerce & Industry (Department of Commerce), States must ensure that they are in a position to supply basic inputs like water, electricity, etc.


How to set up a unit in SEZ?                                                                                                                        


For setting up a manufacturing, trading or service unit in SEZ, 3 copies of project proposal in the format prescribed at Appendix 14-IA of the Handbook of Procedures, Vol.1 are to be submitted to the Development Commissioner of the SEZ.


What is the approval mechanism for the units?


All approvals are to be given by the Unit Approval Committee headed by the Development Commissioner. Clearance from the Department of Policy and Promotion / Board of Approvals, wherever required will be obtained by the Development Commissioner, before the Letter of Intent is issued.


What is the obligation of the Unit under the Scheme?


     SEZ units have to achieve positive net foreign exchange earning as per the formula given in paragraph Appendix 14-II
        (para 12.1) of Handbook of Procedures, Vol.1. For this, a Legal Undertaking is required to be executed by the unit with
        the Development Commissioner.  
     Units have to provide periodic reports to the Development Commissioner and Zone Customs as provided in Appendix
        14-I F of the Handbook of Procedures, Vol.1.
     Units are also to execute a bond with the Zone Customs for their operation in the SEZ.
     Companies set up with FDI have to be incorporated under the Indian Companies Act with the Registrar of Companies
        for undertaking Indian operations. 


What is the procedure to obtain Single Window Clearance for setting up SEZs in Karnataka?             


Projects with investments between INR 3 to 50 crores, will be cleared by the State Level Single Window Clearance Committee (SLSWCC), chaired by the Principal Secretary, Dept. of Commerce and Industries, Government of Karnataka.
If the investment is above than INR 50 crores, it will be cleared by the State High Level Clearance Committee (SHLCC), chaired by the Chief Minister, Govt. of Karnataka.
The application forms for SLSWCC/ SHLCC are to be submitted to:
Karnataka Udyog Mitra
3rd Floor, South Block, Khanija Bhavan
Race Course Road, Bangalore - 560 001
Phone: 91-80-22286632, 22285659, 22282392
Fax: 91-80-22266063
The form can be downloaded from www.kumbangalore.com
For more information on SEZ's, please log on to http://commerce.nic.in  or http://www.sezindia.nic.in


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