Hyperactive Commerce Ministry – issues follow up instructions consequent to “open House”
Commerce Secretary, GK Pillai chaired an “open House” organised by the EXPORT PROMOTION COUNCIL FOR EOUs & SEZs (EPCES) in Mumbai on 20/06/2008.
i ) Time frame for disposal of various activities in SEZ
In the meeting, it was suggested that for various permissions to be granted in the SEZs , a time frame should be prescribed. The C ommerce Ministry readily agreed and issued instructions on 17/7/2008, prescribing the following time frame.
Sl. No. | Category of Application | Proposed Time limit for disposal (Days) |
|---|---|---|
1. | Issue of LoA excepting cases requiring approval of BoA | Approval of all these activities, along with initial issuance of LOA - 15 days |
2. | Annual permission for sub-contracting | |
3. | Allotment of Importer – Exporter Code number | |
4. | Allotment of land / industrial sheds in the Special Economic Zone | |
5. | Water connection | |
6. | Registration –cum-Membership Certificate | |
7. | Small Scale Industries Registration | |
8. | Registration with C entral Pollution Control Board | |
9. | Power Connection | |
10. | Building approval plan | |
11. | Sales Tax Registration | |
12. | Approval from inspectorate of factories | |
13. | Pollution control clearance , wherever required | |
14. | Amendment of LoA | 15 |
15. | Acceptance of Bond cum LUT | 7 |
16. | Renewal of Bond cum LUT | 3 |
17. | Permission for board banding / diversification | 15 |
18. | Permission for merger of Units | 15 |
19. | Permission for enhancement of production capacity | 7 |
20. | Cancellation of LoA | 15 |
21. | Permission for debonding /exit | 15 |
22. | Eligibility certificate for employment visa for technicians | 2 |
23. | Issue of Identify Card | 2 |
24. | Renewal of Identify Card | Same day |
25. | Permission for disposal of scrap/waste | 2 |
26. | Permission for change in name | 7 |
27. | Inter Unit Transfer | 2 |
28. | Permission for re-import | Same day |
29. | Permission for re-export | Same day |
30. | Permission for replacement /repair of goods | Same day |
31. | Authorization of softex form | Same day |
32. | Issue of GSP Certificate | Same day |
(ii) making available Form I to the SEZ Developers
In the open house meeting it was pointed out that Form-I is not being made available to the SEZ Developers. Specifically it was pointed out that in the case of IT Sector SEZs, in Haryana, Form-I was not given. Immediately after the open house, Form I was made available for this IT sector SEZ in Haryana. In addition, Ministry of Commerce & Industry issued a letter to all Development Commissioners advising to ensure that Form I is made available on time to ensure that SEZ developers are able to avail the benefit of CST exemption as per Rules. In respect of IT Sector SEZ, a meeting was convened by Shri G.K. Pillai, Secretary Commerce & Shri Jainder Singh, Secretary IT on 3/7/2008 wherein Director General (STPI), Joint Secretary DOC, and all the Directors STPI (DC IT Sector SEZs) were present and Director (STPIs) were directed to ensure timely availability of Form I to SEZ Developers.
(iii) Clarification regarding processing and non-processing area in the Zone
In the Open House, a doubt was raised whether roads, open spaces, etc., inside the zone will be part of the processing area. Ministry has clarified that “It is obvious that each of these demarcated areas will have road, open spaces as per the building byelaws, etc. These roads, open spaces, etc., along with the built up area will be part of the demarcated area within which these are physically located, whether processing or non-processing or free trade and warehousing area as demarcated by the Development C ommissioner"
(iv) Directions to Director STPIs (DC: IT Sector SEZs)
In the open house meeting, a number of issues relating to IT Sector SEZs were pointed out wherein the SEZ developers were having problems. It was decided that appropriate instructions would be issued to the Director STPIs (DC IT Sector SEZs) so that the SEZ developers don't face any problems. Accordingly, the following directions were issued:-
1. No validity period for goods and services: IT Sector SEZ developers had pointed out that Unit Approval Committee is giving list of goods and services approved with a validity period of 6 months. It has been pointed out that there should be no validity condition of 6 months.
2. No restriction on Imported/indigenous goods: It has been pointed out by SEZ developers that in the list of goods and services approved, UACs were pointing out specifically the list of the goods which are to be imported and the list of the goods which are to be procured from the domestic market. It has been pointed out that a list of material should be approved as "indigenous/imported" as it is up to the developer to decide whether to import or procure from domestic market.
3. Only quantity and not value and duty foregone: It has been pointed out that IT Sector SEZ developers that along with the quantity UAC were also asking for the value and duty foregone. It has been advised that quantity needs to be mentioned and the value and duty foregone should not be insisted.
4. UAC to meet once in a month: It has been advised that UAC should meet once in a month so that list of material can be approved every month and constructions activities can be completed in time.
5. No approved building plan before considering any request. It was advised in the meeting that in view of delay in approval of building plans, in some states there is a compounding fee concept and in that case developer may start construction even without approved building plans. It was felt that the approach should be as positive as possible and once the developer submits a copy of its proposed master plan and building plan under approval indicating built up area to enable to correlate the same with the building material there should be no problem to the UAC to approve the material.
6.AC Building for the DC: As regards the administrative block for DC's office is concerned, it was advised that separate administrative block of 5000 sq.ft. for DC's office should not be insisted upon and it should be left to the developer to provide air-conditioned space in any building except basement near parking space etc.
v) Refund of Terminal Excise Duty in respect of supply of HSD received from HPCL Depot at Pune by M/s Semco Electric Pvt Ltd: M/s SEMCO Electric Pvt Ltd, Pune, had pointed out an individual case of non payment of refund of TED. Ministry of Commerce has issued clarification to DC SEEPZ vide letter No. 13/84/2004-EOU dated 2/7/2008 for settlement of this case.
vi) CBDT Related Issues: There were number of issues raised relating to CBDT. Commerce Secretary has convened a meeting with Chairman CBDT wherein all these issues will be discussed.
The next OPEN HOUSE meet chaired by the Commerce Secretary is on 4/9/2008 at Kolkata.
They don't seem to have any issues with Customs and Central Excise; maybe they know that problems will be further complicated if they discuss these issues.
Maybe the Revenue Department should emulate the Commerce Ministry.
EPCES CIRCULAR NO. 17 DATED 28.7.2008