Overview of SEZ Act, 2005

• Procedure for making proposal to establish SEZ (Sec 3)
• Establishment of SEZ with the approval from Board of Approvals (Sec 4)
• Notifying an area as SEZ by Central Government (Sec 5)
• Approval by Board of Approval for establishment of SEZ (Sec 8 to 10)
• Development Commissioner as administrative Authority for the SEZ (Sec 11 and 12)
• Approval Committee to approve setting up of an unit in SEZ (Sec 13 and 14)
• Single Window Clearance by Approval Committee for setting up unit in SEZ, setting up an OBU and setting up an IFSC (Sec 15 to 20)
• Special fiscal provisions for special economic zones (Sec 26 to 30)
• Establishment of SEZ Authority (Sec 31 to 41)
• Reference of dispute to arbitration (Sec 42 and 43)
• Exemptions and relaxations from provisions of some Central Acts (Sec 49 and 54)

Overview of SEZ Rules, 2006

• Simplification of procedures for development, operation and maintenance of SEZ
• Single Window Clearance for setting up of an SEZ and SEZ Unit
• Single Window Clearance on matters relating to Central as well as State Governments
• Simplified compliance procedures and documentation with an emphasis on self-certification
• Documentation for various activities of the units has been reduced to the barest minimum with an emphasis on self-certification
• No requirement for providing bank guarantees, thereby reducing transaction costs
• Contract manufacturing for foreign principals allowed
• Option to obtain sub-contracting permission at the initial approval stage
• Import-Export of all items, through personal baggage has been allowed Approval Criteria for SEZ Developers
• Sector specific SEZs: Minimum investment of Rs. 250 crore or net worth of Rs. 50 crore
• Multi product SEZs: Minimum investment of Rs. 1000 crore or net worth of Rs. 250 crore

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), the States must satisfy themselves that they are in a position to supply basic inputs like water, electricity, etc.

All approvals 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.