Special Economic Zones Rules Amendment, 2023

Context

• The Ministry of Commerce has issued the Special Economic Zones (SEZ) (5^th Amendment) Rules, 2023. The Ministry invoked powers granted by section 55 of the Special Economic Zones Act, 2005.

Amendment Highlights

1. Demarcation Provision: The Board of Approval can authorize the demarcation of a segment within an Information Technology Enabled Services SEZ as a non-processing area.
2.  Area Clarification: The processing area in an SEZ is designated for the manufacture of goods or services, while the non-processing area serves as supporting infrastructure.
3. Tax Benefits Repayment: The amendment outlines the calculation of tax benefits repayment, based on the proportion of the built-up non-processing area to the total built-up processing area.

Significance

1. The amendment enhances business flexibility within SEZs.
2. It safeguards the interests of both developers and occupiers within SEZs.
3. The freed-up space allows for improved utilization, accommodating a diverse range of occupiers.
4. It contributes to diversifying the tenant base within SEZs.

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