Tata Steel and Infosys have requested the government for approval to reduce the sizes of their special economic zones (SEZs) due to change in their business plans.
A call on their requests will be taken by the inter-ministerial board of approval for SEZs, headed by commerce secretary Sunil Barthwal, in its meeting on May 9.
Tata Steel SEZ (formerly Gopalpur SEZ) has requested taking out 282.73 hectares out of 588.65 hectares of its multi product special economic zone in Gopalpur, Odisha. The company got approval for the SEZ in 2017 but now wants a part of the area to be denotified as investments are coming to the domestic tariff area (DTA). While SEZs do enjoy some tax concessions, the new units coming in SEZs want to operate as a DTA unit due to business reasons.
Infosys Limited IT SEZ also wants 20.2 hectares out of 52.6 hectares from its IT/IT-enabled Services SEZ in Indore in Madhya Pradesh. The company has completed the phase 1 of the SEZ despite hurdles posed by lockdowns during the pandemic. In its application, Infosys has said the Covid-19 pandemic led to hybrid operating model as a norm for IT industry. “Consequently we are contemplating optimisation of allotted land to us to create conducive IT eco-system for other prospective companies. Hence, we have surrendered the portion of unutilised land,” the company said.
Similarly, ELCOT has requested for partial cancellation of 2.4 hectares out of 80.88 hectares of its IT/ITES zone in Gangaikondan in Tamil Nadu.
The SEZs are treated as foreign territories for customs and trade purposes. Incentives and facilities being offered to the units in SEZs include duty-free import and domestic procurement of goods, exemption from Integrated Good and Services Tax, Central Goods and Services Tax and customs or excise duties for authorised operations.
To qualify for incentives the application has to be approved by the BOA. After the approval the SEZ is notified. There is a provision of de-notification or partial de-notification of these zones if the BOA approves.
Presently, 368 SEZs are notified in the country, including 7 Central Government and 12 State Government/Private Sector SEZs set up prior to the enactment of SEZ Act, 2005. Out of the total approved, 276 SEZs are operational. With these SEZs 6279 units operational. In April-January of last financial year exports from SEZs grew over 8.3% to $ 143.34 billion.