Sez - a need for enterprise ( part 2 )

SANYAM ARORA (“It's hard to beat a person who never gives up.”)   (20168 Points)

18 September 2011  

First of all A Very Good Morning to all the members of cci family. I Wll take this oppurtunity to thanks all of you for appreciating my work and i promise all of you that i will continue till the end.

Now its the right time to introduce the 2 nd part of my series i.e " SEZ - A Need for Enterprises ".

In the first part we discussed about the basics of SEZ and i know it is not sufficient from the learning aspect..

So in this part you will all come across variety of new things regarding SEZ. 

So lets go for it -

Meaning of Import and Export under SEZ Act - 

Import under SEZ Act, 2005 

From outside India 

 

§Bringing goods or
§  receiving services
§  in a SEZ,
§  by a Unit or Developer
§  from a place outside India, by Land, sea or air or by any other mode
§  whether physical or
§  otherwise
From within India 
 
§Receiving goods or
§  services, by
§  Unit or Developer
§  from another Unit or Developer
§  of the same SEZ or
§  a different SEZ
 
Export under SEZ Act, 2005
 
Sale of Goods or Services Outside India

§Taking goods or providing services out of India
§  from a SEZ by land, sea or air or by any other mode
§  whether physical or otherwise

 

Sale of Goods or Services Within India

 

 

§Supplying goods or providing services from the DTA
 to a Unit or Developer

§Supplying goods or providing services
  from one Unit to another Unit or Developer
  in the same or different SEZ 
 
Key Stakeholders - 
 

1. Central government -    

Overall authority for governing, notifying the SEZ and granting the Letter of Approval (‘LOA’)

2. State Government -

 

Receives and forwards the proposal with recommendations to the Board of Approval.

3. Board of Approval ( BOA ) -

 

Considers proposals for setting up SEZ and Units in SEZ (proposal for units relating to foreign collaborations and Foreign Direct Investment). 

Net Foreign Exchange Requirement - 

 

►A  Unit is required to achieve positive NFE cumulatively for a period of 5 years from commencement of production.

NFE for this purpose to be calculated as under :

 

Positive NFE = A - B > 0, where

A = Free on Board value of exports and other specified supplies;

B = Sum total of the Cost, Insurance and Freight Value of all imported

   inputs and value of goods obtained from another SEZ unit/ Export

   Oriented Unit/ bonded warehouse etc.

----> As per Instruction No 41 issued my the MoC, NFE is to be calculated in Rupee terms only.  In case a unit is NFE negative and claims that it is due to foreign exchange fluctuation, the Approval Committee may consider such cases; on a case to case basis, provided such computations are certified by an authorized bank.

So friends this brings us to the end of part 2.

I hope you would have enjoyed the ride.

Thanks & Regards

Sanyam Arora