LexThe Special Economic Zones Act, 2005
Madhya Pradesh · state statute
Open in Lexace · Ask the AI about this act~ ~ "tto ~-{Q;i)04/0007/2003----05 REGISTERED NO. DL-{N)04/0007/2003---0S •
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31m1:lft01'
EX1RAORDINARY
~ 11-~l
PARTII-Section 1
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PUBLISHED BY AUIHORITY
1'l ~. ,,wRtc11<, "I:' 23, 2oos131T'fTJ 2, 1921
NEW DELHI, TIIURSDAY, JUNE 23, 2005/ASADHA2, 1927
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Separate paging is given to this Part in order that it may be filed as a separate compilation.
MINISTRYOFLAW AND JUSTICE
(Legislative Department)
New Delhi, the 23rd June, 2005/Asadha2, 1927 (Saka)
The following Act of Parliament received the assent of the President on
the 23rd June, 2005, and is hereby published for general information:-
THE SPECIAL ECONOMIC ZONES ACT, 2005
No. 28 OF 2005
[23rd June, 2005.]
An Act to provide for the establishment, development and management of the
Special Economic Zones for the promotion of exports and for matters
connected therewith or incidental thereto.
BE it enacted by Parliament in the Fifty-sixth Year of the Republic of India as
follows:-
CHAPTER!
PRELIMINARY
1. (/) This Act may t>e called the Special Economic Zones Act, 2005.
(2) It extends to the whole of India.
( 3) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint, and different dates may be appointed for different provisions
of this Act and any reference in any such provision to the commencement of this Act shall
be construed as a reference to the coming into force of that provision.
Short title,
extent and
commence
ment.
2
Definitions.
THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
2. In this Act, unless the context otherwise requires,-
(a) "appointed day" with reference to a Special Economic Zone means the date
on which the Special Economic Zone is notified by the Central Government under
sub-section (/) of section 4;
(b) "Approval Committee" means an Approval Committee constituted under
sub-section (1) of section 13;
(c) "authorised operations" means operations which may be.authorised under
sub-section (2) of section 4 and sub-section (9) of section 15;
(d) "Authority" means a Special Economic Zone Authority constituted under
sub-section (/) of section 3 I;
(e) "Board" means· the Board of Approval constituted under sub-section (J) of
section 8;
(j) "Co-Developer" means a person who, or a State Government which, has been
granted by the Central Government a letter of approval under sub-section (/ 2) of
section 3;
(g) "Developer" means a person who, or a State Government which, has been
g~nted by the Central Government a letter of approval under sub-section (10) of
section 3 and includes an Authority and a Co-Developer;
(h) "Development Commissioner" means the Development Commissioner appointed
for one or more Special Economic Zones under sub-section (/) of section 11 ;
(i) "Domestic Tariff Area" means the whole of India (including the territorial
waters and continental shelf) but does not include the areas of the Special Economic
Zones;
(j) "entrepreneur" means a person who has been granted a letter of approval by
the Development Commissioner under sub-section (9) of section 15;
(k) "existing Special Economic Zone" means every Special Economic Zone which
is in existence on or before the commencement of this Act;
([) "existing Unit" means every Unit which has been set up on or before the
commencement of this Act in an existing Special Econo'llic Zone;
(m) "export" means-
(i) taking goods, or providing services, out of India, from a Special
Economic Zone, by land, sea or air or by any other mode, whether physical or
otherwise; or
(i,) supplying goods, or providing services, from the Domestic Tariff Area
to a Unit or Developer ; or
(iii) supplying goods, or providing services, from one Unit to
another Unit or Developer , in the same or different Special Economic
Zone;
(n) "Free Trade and Warehousing Zone" means a Special Economic Zone
wherein mainly trading and warehousing and other activities related thereto are
carried on;
(o) "import" means-
(i) bringing goods or receiving services, in a Special Economic Zone, by
a Unit or Developer from a place outside India by land, sea or air or by any other
mode, whether physical or otherwise; or
10 of 1949.
2 of 1934.
THE GAZETTE OF INDIA EXTRAORDINARY 3
(i,) receiving goods, or services by a Unit or Developer from another Unit
or Developer of the same Special Economic Zone or a different Special Economic
Zone;
(p) "infrastructure facilities" means industrial, commercial or social infrastructure
or other facilities necessary for the development of a Special Economic Zone or such
other facilities which may be prescribed;
(q) "International Financial Services Centre" means an International Financial
Services Centre which has been approved by the Central Government under
sub-section (/) of section 18;
(r) "manufacture" means to make, produce, fabricate, assemble, process or
bring int9'existence, by hand or by machine, a new product having a distinctive name,
character· or use and shall include processes such as refrigeration, cutting, polishing,
blending, repair, remaking, re-engineering and includes agriculture, aquaculture,
animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture,
viticulture and mining;
(s) "notification" means a notification published in the Official Gazette and
the expression "notify" shall be construed accordingly;
(t) "notified offences" means the offences specified as such under sub-section
( J) of section 21;
(u) "Offshore Banking Unit" means a branch of a bank located in a Special
Economic Zone and which has obtained the permission under clause (a) of
sub-section ( /) of section 23 of the Banking Regulation Act, 1949;
(v) "person" includes an individual, whether resident in India or outside India, a
Hindu undivided family, co-operative society, a company, whether incorporated in
India or outside India, a firm, proprietary concern, or an association of persons or
body of individuals, whether incorporated or not, local authority and any agency,
office or branch owned or controlled by such individual, Hindu undivided family,
co-operative , association, body, authority or company;
(w) "prescribed" means prescribed by rules made by the Central Government
under this Act;
(x) ·Reserve Bank" means the Reserve Bank of India constituted under section
3 of the Reserve Bank oflndiaAct, 1934;
(y) "Schedule" means Schedules to this Act;
(z) "services" means suc_h tradable services which,-
(1) are covered under the General.Agreement on Trade in Services annexed
as 1B to the Agreement establishing the World Trade Organisatio~ concluded at
Marrakesh on the 15th day of April, 1994;
(i1) may be prescribed by the Central Government for the purposes of this
Act; and
(iii) earn foreign exchange;
(za) "Special Economic Zone" means each Special Economic Zone notified
under the proviso to sub-section ( 4) of section 3 and sub-section (/) of section 4
(including Free Trade and Warehousing Zone) and includes an existing Special
Economic Zone;
(zb) "State Government" means a State Government of the State in which a
Special Economic Zone is established or proposed to be established;
(zc) "Unit" means a Unit set up by an entrepreneur in a Special Economic Zone
and includes an existing Unit, an Offshore Banking Unit and a Unit in an International
Financial Services Centre, whether established before or established after the
commencement of this Act;
Procedure for
making
proposal to
establish
Special
Economic
Zone.
4 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
(zd) all other words and expressions used and not defined in this Act but defined
in the Central Excise Act, 1944, the Industries (Development and Regulation)
Act, 1951, the Income-tax Act, 1961, the Customs Act, 1962 and the Foreign Trade
(Development and Regulation)Act, 1992 shall have the meanings respectively assigned
to them in those Acts.
CHAPTERII
ESTABLISHMENT OF SPECIAL ECONOMIC ZONE
3. (J) A Special Economic Zone may be established under this Act, either jointly or
severally by the Central Government, State Government, or any person for manufacture of
goods or rendering services or for both or as a Free Trade and Warehousing Zone.
(2) Any person, who intends to set up a Special Economic Zone, may, after identifying
the area, make a proposal to the State Government concerned for the purpose of setting up
the Special Economic Zone.
(3) Notwithstanding anything contained in sub-section (2), any person, who intends
to set up a Special Economic Zone, may, after identifying the area, at his option, make a
proposal directly to the Board for the purpose of setting up the Special Economic Zone:
Provided that where such a proposal has been received directly from a person under
this sub-section, the Board may grant approval and after receipt of such approval, the
person concerned shall obtain the concurrence of the State Government within the period, as
may be prescribed.
( 4) In case a State Government intends to set up a Special Economic Zone, it may after
identifying the area, . forward the proposal directly to the Board for the purpose of setting up
the Special Economic Zone:
Provided that the Central Government may,-
(a) after consulting the State Government concerned;
(b) without referring the proposal for setting up the Special Economic Zone to
the Board; and
(c) after identifying the area,
suo motu set up a:nd notify the Special Economic Zone.
(5) Every proposal under sub-sections (2) to ( 4) shall be made in such form, and,
manner, containing such particulars as may be prescribed .
( 6) The State Government may, on receipt of the proposal made under sub-section (2),
forward the same together with its recommendations to the Board within such period as may
be prescribed.
(7) Without prejudice to the provisions contained in sub-section (8), the Board may,
after receipt of the proposal under sub-sections (2) to (4), approve the proposal subject to
such terms and conditions as it may deem fit to impose, or modify or reject the proposal.
( 8) The Central Government may prescribe the following requirements for establishment
ofa Special Economic Zone, namely:- •
(a) the minimum area ofland and other terms and conditions subject to-which
the Board shall approve, modify or reject ·any proposal received by it under
sub~sections (2) to (4); and
(b) the terms and conditions, subject to which the Developer shall undertake
the authorised operations and his obligations and entitlements :
Provided that different minimum area ofland and other terms and conditions referred
to in clause (a) may be prescribed by the Central Government for a class or classes of Special
Economic Zones.
(9) If the Board,-
(a) approves without any modification the proposal received under sub-sections
(2) to ( 4), it shall communicate the same to the Central Government;
( b) approves with modifications the proposal received under sub-sections (2) to ( 4),
it shall, communicate such modifications to the person or the State Government
concerned and if such modifications have been accepted by such person or State
Government, the Board shall communicate the approval to the Central Government;
I of 1944.
65 of 1951.
43of 1961.
52 of 1962.
22 of 1992.
SEC. I) THE GAZETTE OF INDIA EXTRAORDINARY 5
(c) rejects the proposal received under sub-sections (2) to ( 4), it shall record the
reasons therefor and communicate the rejection to the Central Government which
shall intimate to the State Government or the person concerned.
(/0) The Central Government shall, on receipt of communication under clause (a) or
clause (b) of sub-section (9), grant, within such time as may be prescribed, a letter ofapprova]
on such terms and conditions and obligations and entitlements as may be approved by the
Board, to the Developer , being the person or the State Governmen~ concerned:
. Provided that the Central Government may, on the basis of approval of the Board ,
approve more than one Developer in a Special Economic Zone in cases where one Developer
does not have in his possession the minimum area of contiguous land, as may-be prescribed ,
for setting up a Special Economic Zone and in such cases, each Developer shall be considered
as a Developer in respect of the land in his possession .
(/I) Any person who, or a State Government which, intends to provide any infrastructure
facilities in the identified area referred to in sub-sections (2) to ( 4), or undertake any authorised
operation may, after entering into an agreement with the Developer referred to in sub-section
( / 0), make a proposal for the same to the Board for its approval and the provisions of sub
section (5) and sub-sections (7) to (/0) shall, as far as may be, apply to the said proposal
made by such person or the State Government.
(/ 2) Every person or the State Government referred to in sub-section ( 1/), whose
proposal has been approved by the Board and who, or which, has been granted letter of
approval by the Central Government , shall be considered as a Co-Developer of the Spedal
Economic Zone.
(/ 3) Subject to the provisions of this section and the letter of approval granted to a
Developer, the Developer may allocate space or built up area or provide infrastructure services
to the approved Units in accordance with the agreement entered into by him with the
entrepreneurs of such Units.
4. (/) The Developer shall, after the grant of letter of approval under sub-section
(/0) of section 3, submit the exact particulars of the identified area referred to in sub
sections (2) to ( 4) of that section, to the Central Government and thereupon that Government
may, after satisfying that the requirements, under sub-section (8) of section 3 and other
requirements, as may be prescribed , are fulfilled, notify the specifically identified area in the
State as a Special Economic Zone:
Provided that an existing Special Economic Zone shall be deemed to have been notified
and established in accordance with the provisions of this Act and the provisions of this Act
shall, as far as may be, apply to such Zone accordingly:
Provided further that the Central Government may, after notifying the Special Economic
Zone, if it considers appropriate, notify subsequently any additional area to be included as
a part of that Special Economic Zone. •
(2) After the appointed day, the Board may, authorise the Developer to undertake in a
Special Economic Zone, such operations which the Central Government may authorise.
5. The Central Government, while notifying any area as a Special Economic Zone or an
additional area to be included in the Special Economic Zone and discharging its functions
under this Act, shall be guided by the following, namely:-
(a) generation of additional economic activity;
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
(e) development of infrastructure facilities; and
(j) maintenance of sovereignty and integrity of India, the security of the State
and friendly relations with foreign States.
Establishment
of Special
Economic
Zone and
approval and
authorisation
to operate it
to, Developer.
Guidelines for
notifying
Special
Economic
Zone .
Processing and
non-process
ing areas.
Exemption
from taxes,
duties or cess.
Constitution
of Board of
Approval
'-
6 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
6. The areas falling within the Special Economic Zones may be demarcated by·the
Central Government or any authority specified by it as-
(a) the processing area for setting up Units for activities, being the manufacture
of goods, or rendering services; or
(b) the area exclusively for trading or warehousing purposes; or
(c) the non-processing areas for activities other than those specified under
clause (a) or clause (b).
7. Any goods or services.exported out of, or imported into, or procured from the
Domestic Tariff Area by,-
. (0 a Unit in a Special Economic Zone; or
' (ii) a Developer,
shall, subject to. ·such terms, conditions and limitations, as may be prescribed, be exempt
from the payment of taxes, duties or cess under all enactments specified in the
First Schedule.
CHAPTERIII
CONSTITUTION OF BOARD OF APPROVAL
8. (1) The Central Government shall, within fifteen days of the commencement of this
Act, by notification, constitute, for the purposes of this Act, a Board to be called the Board
of Approval.
(2) The Board shall consist of-
(a) an officer not below the rank of an Additional Secretary to the Government
of India in the Ministry or Department of the Central Government dealing with
commerce-Chairperson, ex officio;
(b) two officers, not below the rank of a Joint Secretary to the Government of
India, to be nominated by the Central Government to represent the Ministry or
Department of the Central Government dealing with revenue-Members, ex officio;
(c) one officer not below the rank of a Joint Secretary to the Government of
India to be nominated by the Central Government to represent the Ministry or
Department of the Central Government dealing with economic affairs (financial
services}- Member, ex officio;
(cl) such number of officers, not exceeding ten, not below the rank of the Joint
Secretary to the Government oflndia, to be nominated by the Central Government to
represent the Ministries or Departments of the Central Government dealing with
commerce, industrial policy and promotion, science and technology, small scale
industries and agro and rural industries, home affairs, defence, environment and forests,
law, overseas Indian affairs and urban Gevelopment-Members, ex officio;
(e) a nominee of the State Government concerned-Member, ex officio;
(j) the Director General of Foreign Trade or his nominee-Member, ex officio;
(g) the Development Commissioner concerned-Member, ex officio;
(h) a Professor in the Indian Institute of Management, being a,society registered
under the Societies Registration Act, 1860 or the Indian Institute of Foreign Trade, 21 of 1860.
being a society registered under the 'societies Registration Act, 1860, as may be,
nominated by the Central Government-Member, ex officio;
(i) an officer not below the rank of Deputy Secretary to the Government of
India dealing with the Special Economic Zones in the Ministry or Department of the
Central Government, dealing with commerce to be nominated by the Central
Government-Member-Secretary, ex officio:
Provided that the member, being the Joint Secretary, nominated under clauses (b) to (d)
of this sub-section may, if he is unable to attend the meeting of the Board, authorise any
other officer to attend the meeting of the Board on his behalf.
65 of 1951
SEC. I] THE GAZETTE OF INDIA EXTRAORDINARY 7
(3) The Lrm of office of an ex officio Member shall come to an end as soon as he
ceases to ho1d the office by virtue of which he was so nominated
(4) For the purposes of performing its functions, the Board may co-opt as members,
. such number of persons as it deems fit, who have special knowledge of, and practical
experience in, matters relating to, or relevant to activity connected with the Special
Economic Zones and any such person shall have the right to take part in the discussions of
the Board but shall not be counted for the quorum and shall not be a memoer for any other
purpose and such person shall be entitled to receive such allowances or fees, as the case
may be, fixed by the Board.
(5) The Board shall meet at such times and places as may be appointed by it and shall
~ave the po.wer-to regulate its own procedure.
( 6) One-third of the total Members of the Board shall form a quorum, and all the acts of
t • .. • "
the Board shall h~ decided by a general ~onsensus of the Members present. . •
(7) No act or proceeding of the Board shall be called in question on the ground merely
of existence of any vacancy in, or any defect in the constitution of, the Board.
(8) All orders and decisions of the Board and all other instruments issued by it shall be
authenticated by the signature of the Member-Secretary, or any other Member as may be
authorised by the Board in this behalf.
9. (/) Subject to the provisions of this Act, the Board shall have the duty to promote Duties, powers
and ensure orderly development ot: the Special Economic Zones. and functions
of Board. (2) Without prejudice to the generality of the provisions contained in sub-section
(1), the powers and functions of the Board shall include-
(a) granting of approval or rejecting proposal or modifying such proposals for
establishme~t of the Special Economic Zones;
(h) granting approval of authorised operations to be carried out in the Special
Economic· Zones by the Developer;
(c) granting of approval to the Developers or Units ( other than the Developers
or the Units which are exempt from obtaining approval under any law or by the Central
Government) for foreign collaborations and foreign direct investments (including
investments by a person resident outside India), in the Special Economic Zone for
its development, operation and maintenance;
(d) granting of approval or rejecting of proposal for providing infrastructure
facilities in a Special Economic Zone or modifying such proposals;
(e) granting, notwithstanding anything contained in the Industries (Development
and Regulation) Act, 1951, a licence to an industrial undertaking referred to in clause
(d) of section 3 of that Act, if such undertaking is established, as a whole or part
thereof, or proposed to be established, in a Special Economic Zone;
(j) suspension of the letter of approval granted to a Developer and appointment of
an Administrator under sub-section (J) of section 10;
(g) disposing of appeals preferred under sub-section ( 4) of section I 5;
(h) disposing of appeals preferred under sub-section ( 4) of section I 6;
(i) performing such other functions as may be assigned to it by the Central
Government.
(3) The Board may, if so required for the purposes of this Act or any other law for the
time being in force relating to Special Economic Zones, by notification, decide as to whether
a particular activity constitutes manufacture as defined in clause (r) of section 2 and such
decision of the Board shall be binding on all Ministries and Departments of the Central
Government.
( 4) The Board may delegate such powers and functions as it may deem fit to one or
more Development Commissioners for effective and proper discharge of the functions of
the Board.
(5) Without prejudice to the foregoing provis ions of this Act, the Board shall, in
exercise of its powers or the performance of its functions under this Act, be bound by such
Suspension of
letter of
approval and
transfer of
Special
Economic
Zone in
certain cases.
8 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
directions on questions of policy as the Central Government may give in writing to it from
time to time.
(6) The decision of the Central Government whether a question is one of policy or not
shall be final.
10. (/) If, at any time, the Board is of the opinion that a Developer-
(a) is unable to discharge the functions or perform the duties imposed on him by
or under the provisions of this Act or rules made thereunder; or
(b) has persistently defaulted in complying with any direction gi\en by the
Board under this Act; or
(c) has violated the terms and conditions of the letter of approval; or
(d) whose financial position is such that he is unable to fully and efficiently
discharge the duties and obligations i~posed on him by the letter of approval, and
the circumstances exist which render it necessary for it in public interest so to do, the
Board may, on application, or with the consent of the Developer, or otherwise, for reasons
to be recorded in writing, suspend the letter of approval, granted to the Developer for a
whole or part of his area established as Special Economic Zone, for a period not exceeding
one year and appoint an Administrator to discharge the functions of the Developer in ac,cordance
with the terms and conditions of the letter of approval and manage the Special Economic Zone
accordingly.
(2) Consequent upon appointment of an Administrator, the management of the Special
Economic Zone of the Developer referred to in sub-section (1) shall vest in the
Administrator.
(3) No letter of approval shall be suspended under sub-section(/) unless the Board
has given to the Developer not less than three months' notice, in writing, stating the grounds
on which it proposes to suspend the letter of approval, and has considered any cause
shown by the Developer within the period of that notice, against the proposed suspension.
( 4) The Board may, instead of suspending the letter of approval under sub-section
(]), permit it to remain in force subject to such further terms and conditions as it thinks fit
to impose, and any further terms or conditions so imposed shall be binding upon and be
complied with by the Developer and shall be of like force and effect as if they were
contained in the letter of approval.
(5) In case the Board suspends a letter of approval under this section, it shall serve
a notice of suspension upon the Developer and fix a date on which the suspension shall
take effect.
(6) Upon suspension of the letter of approval under sub-section (/), the Special
Economic Zone of the Developer referred to in sub-section (5) shall vest in the
Administrator under sub-section (2) for a period not exceeding one year or up to the date
on which the letter of approval for such ·special Economic Zone is transferred, whichever
is earlier, in accordance with the provisions contained in sub-sections (7) and (9), as the
case may be.
(7) Where the Board has given notice for suspension of letter of approval under
sub-section (5), the Developer may, after prior approval of the Board, transfer his letter of
approval to any person who is found eligible by the Board for grant of such approval.
(8) Ifat any time, it appears to the Board that the purpose of the order appointing the
Administrator has been fulfilled or that for any reason it is undesirable that the order of
appointment should remain in force, the Board may cancel the order and thereupon the
Administrator shall be divested of the management of the Special Economic Zone which
shall, unless otherwise directed by the Board, again vest in the person, being the Developer,
in whom it was vested immediately prior to the date of app9intment of the Administrator.
(9) Where the Board suspends the letter of approval, under this section, in respect
of any Developer, the following provisions shall applr, namely:-
(a) the Board shall invite applications for transferring the letter of approval of
the Developer, whose approval has been suspended and select the person or persons,
in accordance with the procedure as may be prescribed, to whom the letter of approval
of the Developer. in the Special Economic Zone may be transferred;
SEC. I] THE GAZETTE OF INDIA EXTRAORDINARY 9
(b) upon selection of person or persons under sub-clause (a), the Board may,
by notice in writing, require the Developer to transfer his letter of approval in a
Special Economic Zone to the person or persons so selected and thereupon the
Developer shall transfer his interests, rights and liabilities in the Special Economic
Zone to any of the persons (hereafter in this section referred to as the "transferee ")
who has been selected by the Board on such terms and conditions and consideration
as may be agreed upon between the Developer and the transferee;
(c) alt the rights, duties, obligations and liabilities of the Developer, on and from
the date.of suspension of letter of approval or on and from the date, if earlier, on which
his letter of approval in the Special Economic Zone of the Developer has been
transferred to the transferee, shall cease absolutely except for any liabilities which
have accrued prior to that date;
( cl) the Board may make such interim arrangements in regard to the operation of
the Special Economic Zone as may be considered appropriate;
(e) the Administrator shall exercise such powers and discharge such functions
as the Board may direct.
(IO) The Board may, in order to promote export or to protect the interest of Units
or in the public interest, issue such directions or formulate such scheme as it may consider
necessary for operation of the Special Economic Zone.
CHAPTERIV
DEVELOPMENT COMMISSIONER
11. (J) The Central Government may appoint any of its officers not below the rank of Developmen t
Deputy Secretary to the Government of India as -the Development Commissioner of one or Commissioner.
more Special Economic Zones.
(2) The Central Government may appoint such officers and other employees as it
considers· necessary to assist the Development Commissioner in the performance of his
functions in the Special Economic Zones established by a Developer ( other than the Central
Government) under this Act on such terms and conditions as it deems fit.
(3) Every Development Commissioner, officer and other employee shall be entitled to
such salary and allowances and subject to such terms and conditions of service in respect
ofleave, pension, provident fund and other matters as may, from time to time, be specified by
the Central Government.
12. (J) Every Development Commissioner shall take all steps in order to discharge his
functions under this Act to ensure speedy development of the Specfal Economic Zone and
promotion of exports therefrom.
(2) Without prejudice to the generality of the foregoing provisions, the Development
Commissioner shall-
(a) guide the entrepreneurs for setting up of Units in the Special Economic
Zone;
(b) ensure and take suitable steps for effective promotion of exports from the
Special Economic Zone;
( c) ensure proper co-ordination with the Central Government or State Government
Departments concerned or agencies with respect to, or for the purposes, of clauses (a)
and (b);
(cl) monitor the performance of the Developer and the Units in a Special Economic
Zone ;
(e) discharge such other functions as may be assigned to him by the Central
Government under this Act or any other law for the time being in force; and
(j) discharge such other functions as may be delegated to him by the Board.
Functio ns of
Develop ment
Commi ssioner.
. . .
Constitution
of Approval
Committee.
10 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
(3) Every Development Commissioner shall be overall in-charge of the Special Economic
Zone and shall exercise administrative control and supervision over the officers and employees
appointed under sub-section (2) of section 11 (including the officials deputed to such Special
Economic Zone) to discharge any of the functions under this Act.
( 4) Without prejudice to the provisions of sub-sections (/)to (3), every Oevelopment
Commissioner shall distharge such functions and exercise such powers as may be delegated
to him by a general or special order by the Central Government or the State Government
concerned, as the case may be.
(5) Every Development Commissioner may call for such information from a Developer
or Unit from time to time as may be necessary to monitor the performance of the Developer or
the Unit, as the case may be.
( 6) The Development Commissioner may delegate any or all of his powers or functions
to any of the officers employed under him.
CHAPTERV
SINGLE WINDOW CLEARANCE
13. (]) The Central Government shall,-
(a) in the case of existing Special Economic Zones, within six months from the
date of commencement of this Act;
( b) in case of other Special Economic Zones established after the commencement
of this Act, within six months from the date of establishment of such Special Economic
Zone,
by notification, constitute a Committee for every Special Economic Zone, to be called
the Approval Committee to exercise the powers and perform the functions specified in
section 14.
(2) Every Approval Committee shall consist of-
(a) the Development Commissioner-Chairperson, ex officio;
( b) two officers of the Central Government to be nominated by that Government-
Members, ex officio; •
(c) two officers of the Central Government to be nominated by that Government
to represent the Ministry or Department dealing with revenue-Members, ex officio;
(d) one officer of the Central Government to be n,ominated by that Government
to represent the Ministry or Department dealing with economic affairs (financial
services}--Member, ex officio;
(e) two officers of the State Government concerned to be nominated by that
Sta~ Government-Members, ex officio;
(j) a representative of the Developer concerned-Special invitee.
(3) For the purpose of exercising its powers and performing its functions, the
Approval Committee may invite to its meetings, such persons as the Committee deems fit,
whose assistance or advice it may consider necessary.
( 4) Every Approval Conµnittee shall' meet at such times and places as it considers
necessary and shall have the power to regulate its own procedure.
(5) One-half of the total Members of the Approval Committee shall form a quorum,
and all the acts of the Approval Committee shall be decided by a general consensus of the
Members present: •
Provided that in case the Approval Committee is unable to decide any matter by a
general consensus, such matter shall stand referred to the Board of Approval for its decision.
. ( 6) No act of the Approval Committee shall be called in question on the ground
merely of existence of any vacancy in. or any defect in the constitution of, the Approval
Committee .
(7)AII orders and decisions of the Approval Committee and all other communications
issued by it shall be authenticated by the signature of the Chairperson or any other member
as may be authorised by the Approval Committee in this behalf.
SEC. I) THE GAZETTE OF fNDIA EXTRAORDINARY 1 l
(8) The term of office of an ex officio Member shall come to an end as soon as he
ceases to hold office by virtue of which he was so nominated.
14. (1) Every Approval Committee may discharge the functions and exercise the powers
in respect of the following matters, namely:-
( a) approve the import or procurement of goods from the Domestic Tariff Area,
in the Special Economic Zone for carrying on the authorised operations by a Developer;
(b) approve the providing of services by a service provider, from outside India,
or from the Domestic Tariff Area, for carrying on the authorised operations by the
Developer, in the Special Economic Zone;
(e) monitor the utilisation of goods or services or warehousing or trading in
tpe Special Economic Zone;
(d) approve, modify or reject proposals for setting up Units for manufacturing
or rendering services or warehousing or trading in the Special Economic Zone [ other
than the grant oflicence under clause (e) of sub-section (2) of section 9) in accordance
with the provisions of sub-section ( 8) of section 15:
Provided that where the Approval Committee is unable to decide whether a
particular process constitutes manufacture or not it shall refer the same to the Board
of Approval for decision;
(e) allow, on receipt of approval under clause (c) of sub-section (2) of section 9,
foreign collaborations and foreign direct investments (including investments by a
person outside India) for setting up a Unit;
(j) monitor and supervise compliance of conditions subject to which the letter
of approval or permission, if any, has been granted to the Developer or entrepreneur;
and
(g) perform such other functions as may be entrusted to it by the Central
Government or the State Government concerned, as the case may be.
(2) The Approval Committee shall not discharge such functions and exercise such
powers referred to in sub-section (1) in relation to a Developer, being the Central
Government, as may be specified, by notification, by the Central Government :
Provided that till such time, the Approval Committee 1s constituted, the concerned
Development Commissioner shall discharge all functions and exercise all powers of the
Approval Committee.
Powers and
functior,, of
Approval
Committee .
15. (J) Any person, who intends to set up a Unit for carrying on the authorised Setting up of
operations in a Special Economic Zone, may submit a proposal to the Development Unit
Commissioner conceme1 in such form and manner containing such particulars as may be
prescribed:
Provided that an existing Unit shall be deemed to have been set up in accordance
with the provisions of this Act and such Units shall not require approval under this Act.
(2) On receipt of the proposal under sub-section (J), the Development Commissioner
shall submit the same to the Approval Committee for its approval.
(3) The Approval Committee may, either approve the proposal without modification,
or approve the proposal with modifications subject to such terms and conditions as it may
deem fit to impose, or reject the proposal in accordance with the provisions of sub
section (8):
Provided that in case of modification or rejection of a proposal, the Approval
Committee shall afford a reasonable opportunity of being heard to the person concerned
and after recording the reasons, either modify or reject the proposal.
( 4) Any person aggrieved by an order of the Approval Committee, made under sub
section (3), may prefer an appeal to the Board within such time as may be prescribed.
(5) No appeal shall be admitted if it is preferred after the expiry of the time
ptescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed
therefor if the appellant satisfies the Board that he had sufficient cause for not preferring
the appeal within the prescribed time.
12 THE GAZETTE OF INDIA EXTRAORDINARY [PARTII-
(6) Every appeal made under sub~section ( 4) shall be in such form and shall be
accompanied by a copy of the order appealed against and by such fees as may be prescribed.
(7) The procedure for disposing of an appeal shall be such as may be prescribed :
Provided that before disposing of an appeal, the appellant shall be given a reasonable
opport unity of being heard.
(8) The Central Government may prescribe,
(a) the requirements (including the period for which a Unit may be set up)
subject to which the Approval Committee shall approve, modify or reject any proposal
referred to in sub-section (3);
(b) the tenns and conditions, subject to which the Unit shall undertake the
authorised operations and its obligations and entitlements.
·, • (9) The Development Commissioner may, after approval of the proposal referred to in
• sub-section (3), grant a letter of approval to the person concerned to set up a Unit and
undertake such operations which the Development Commissioner may authorise and every
such operation so authorised shall be mentioned in the letter of approval.
Cance llation
of letter of
approval to
ent repreneur.
Settmg up and
operation of
Offshore
Bankmg Unit
16. (/) The Approval Committee may, at any time, if it has any reason or cause to
believe that the entrepreneur has persistently contravened any of the terms and conditions
or its obligations subject to which the letter of approval was granted to the entrepreneur,
cancel the letter of approval:
Provided that no such letter of approval shall be cancel led unless the entrepreneur has
been afforded a reasonable opportunity of being heard.
(2) Where the letter of approval has been cancelled under sub-section (/), the Unit
shall not, from the date of such cancellation, be entitled to any exemption, concession ,
benefit or deduction available to it, being a Unit, under this Act.
(3) Without prejudice to the provisions of this Act, the entrepreneur whose letter of
approval has been cancelled under sub-section (/), shall remit, the exemption, concession.
drawback and any other benefit availed by him in respect of the capital goods, finished
goods lying in stock and unutilised raw materials relatable to his Unit, in such manner as may
be prescribed.
( 4) Any person aggrieved by an order of the Approval Committee made under sub
section (/), may prefer an appeal to the Board within such time as may be prescribed .
(5) No appeal shall be admitted ifit is preferred after the expiry of the time prescribed
therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed
therefor if the appellant satisfies the Board that he had sufficient cause for not preferring the
appeal within the prescribed time.
(6) Every appeal made under sub-section ( 4) shall be in such fonn and shall be
accompanied by a copy of the order appealed against and by such fees as may be prescribed.
(7) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing ofan appeal, the appellant shall be given a reasonable
opportunity of being heard.
17. (/) An application for setting up and operation ofan Offshore Banking Unit in a
Special Economic Zone may be made to the Reserve Bank in such fonn and manner as may be
prescribed.
(2) On receipt of an application under sub-section (/), the Reserve Bank shall, if it is
satisfied that the applicant fulfils all the conditions specified under sub-section (3), grant
pennission to such applicant for setting up and operation of an Offshore Banking Unit.
(3) The Reserve Bank may, by notification, specify the tenns and conditions subject
to which an Offshore Banking Unit may be set up and operated in the Special Economic
Zone.
THE GAZETTE OF INDIA EXTRAORDINARY 13
18. ( i) fhe Central Government may approve the setting up of an International Financial
Services Centre in a Special Economic Zone and prescribe the requirements for setting up
and operation of such Centre·:
Provided that the Central Government shall approve only one International Financial
Services Centre in a Special ·Economic Zone.
(2) The Central Government may, subject to such guidelines as may be framed by the
Reserve Biink, the Securities and Exchange Board of India, the Insurance Regulatory and
Development Authority and such other concerned authorities, as it deems fit, prescribe
the requirements for setting up and the terms and conditions of the operation of Units in
an International Financial Services Centre.
19. Notwithstanding anything contained in any other law for the time being in force,
the Central Government may, if required,-
Selling up ,ir
ln1crna11onal
Financial
Services
Centre
Smglc
apphca11on
form. return,
(a) prescribe a single application form for obtaining any licence, permission etc
or registration or approval by a Developer, or an entrepreneur under one or more
Central Acts;
(b) authorise the Board, the Development Commissioner or Approval
Committee, to exercise the powers of the Central Government on matters relating
to the development ofa Special Economic Zone or setting up and operation of Units;
(c) prescribe a single form for furnishing returns or information by a Developer
or an entrepreneur under one or more Central Acts.
20. Notwithstanding anything contained in any other law for the time being in force,
the Central Government may, by notification, specify any officer or agency to carry out
surveys or inspections for securing of compliance with the provisions of any Central Act
by a Developer or an entrepreneur, as the case may be, and such officer or agency shall
submit verification and compliance reports, in such manner and within such time as may
be specified in the said notification.
21. (/) The Central Government may, by notification, specify any act or omission
made punishable under any Central Act, as notified offence for the purposes of this Act.
(2) The Central Government may, by general or special order, authorise any officer or
agency to be the enforcement officer or agency in respect of any notified offence or offences
committed in a Special Economic Zone.
(3) Every officer or agency authorised under sub-section (2) shall have all the
corresponding powers of investigation, inspection, search or seizure as is provided under
the relevant Central Act in respect of the notified offences.
22. The agency or officer, specified under section 20 or section 21, may, with prior
intimation to the Development Commissioner concerned, carry out the investigation,
inspection, search or seizure in the Special Economic Zone or in a Unit if such agency or
officer has reasons to believe (reasons to be recorded in writing) that a notifiExcerpt shown. Open the full act in Lexace.