New Delhi, Oct. 15: The government has modified the guidelines for special economic zones (SEZs) to prevent the misuse of land after the developer seeks to surrender the tax-free enclaves.
“The changes in the guidelines are to prevent the misuse of the land. The developers seeking to surrender the SEZs should give an undertaking to abide by these conditions to be considered for denotification,” officials said.
According to the amended SEZ rules, “All such proposals (for denotification) must have an unambiguous ‘no objection certificate’ from the state government concerned. Such land parcels after denotification will conform to land use guidelines/master plans of the respective state governments.”
The state governments may also ensure that the denotified parcels of land are utilised to create infrastructure to subserve the objective of the SEZs as originally envisaged.
These conditions are in addition to those which the Board of Approval may impose, including refund of duties/benefits that the developer may have got on the land to be denotified, officials said.
SEZs have lost sheen following the imposition of minimum alternate tax and dividend distribution tax in 2011, certain provisions in the proposed Direct Taxes Code and the global slowdown in demand.
As many as 58 developers had surrendered their projects till July 31.
The government had recently eased land requirement norms to rekindle investor interest because aggregating large tracts of uncultivable land to set up the zones was becoming difficult for developers.
For multi-product SEZs, the minimum land requirement has been brought down from 1,000 hectares to 500 hectares and for sector-specific zones, it has been cut by half to 50 hectares. Also, there will be no minimum land requirement for setting up IT\ITeS SEZs, besides easing of minimum built-up area criteria.
“Minimum built-up area requirements (for IT\ITeS SEZs) have also been considerably relaxed,” the guidelines said.
The minimum built-up area requirements will be 100,000 square metres for Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Calcutta, 50,000 square metres for category B cities and only 25,000 square metres for the remaining ones.
The government has formally approved 576 SEZs, of which 173 have commenced exports. During April-June, exports from these enclaves stood at Rs 1.13 lakh crore compared with the overall exports of Rs 4.05 lakh crore.