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Union of India - Section

Section 5 in The Special Economic Zones Rules, 2006

5. Requirements for establishment of a Special Economic Zone. - (1) The Board may approve as such or modify and approve a proposal for establishment of a Special Economic Zone, in accordance with the provisions of sub-section (8) of section 3, subject to the requirements of minimum area of land and other terms and conditions indicated in sub-rule (2).

(2)[ The requirements of minimum area of land for a class or classes of Special Economic Zone in terms of subsection (8) of section 3 shall be the following, namely: -
(a)A Special Economic Zone or Free Trade Warehousing Zone other than a Special Economic Zone for Information Technology or Information Technology enabled Services, Biotech or Health (other than hospital) service, shall have a contiguous land area of fifty hectares or more: Provided that in case a Special Economic Zone is proposed to be set up in the States of Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttarakhand, Sikkim, Goa or in a Union territory, the area shall be twenty-five hectares or more.
(b)There shall be no minimum land area requirement for setting up a Special Economic Zone for Information Technology or Information Technology enabled Services, Biotech or Health (other than hospital) service, but a minimum built up processing area requirement shall be applicable, based on the category of cities, as specified in the following Table, namely: –
SL.No.1 Categoryof cities as perAnnexure IV A Minimumbuilt up area requirement
(1) (2) (3)
1. Category'A' 1,00,000sq mts
2. Category'B' 50,000sq mts
3. Category'C' 25,000sq mts
(c)The minimum processing area in any Special Economic Zone cannot be less than fifty per cent. of the total area of the Special Economic Zone.
(d)All existing notified Special Economic Zone shall be deemed to be a multi-sector Special Economic Zone.
Explanation. – For the purpose of this clause, a "multi-sector Special Economic Zone" means a Special Economic Zone for more than one sector where Units may be setup for manufacture of goods falling in two or more sectors or rendering of services falling in two or more sectors or any combination thereof including trading and warehousing.]
(3)The requirements of the minimum area of land for the Special Economic Zones,-
(a)which had been, before the commencement of these rules,-
(i)recommended by the Board of Approval constituted by the notification of the Government of India, in the Ministry of Commerce and Industry (Department of Commerce) Number 14/1/2001-EPZ, dated the 7th August, 2001; and
(ii)approved by the Central Government;
(b)which had acquired or taken possession of the land required for setting up of the Special Economic Zones before the commencement of these rules; and
(c)which are situated in any of the States mentioned under column (2) of the Annexure II to these rules, shall, for each sector under column (3) of the Annexure II, be such as mentioned in the corresponding entries under column (4) against each such sector situated in the State mentioned under column (2) of the said Annexure II.
(4)The Developer or Co-Developer shall have at least twenty-six per cent. of the equity in the entity proposing to create business, residential or recreational facilities in a Special Economic Zone in case such development is proposed to be carried out through a separate entity or a special purpose vehicle being a company formed and registered under the Companies Act, 1956 (1 of 1956).
(5)Before recommending any proposal for setting up of a Special Economic Zone, the State Government shall endeavor that the following are made available in the State to the proposed Special Economic Zone Units and Developer, namely:-
(a)exemption from the State and local taxes [State Goods and Services Tax] [Inserted by Notification No. G.S.R. 909(E), dated 19.9.2018 (w.e.f. 10.2.2006).], levies and duties, including stamp duty, and taxes levied by local bodies on goods required for authorized operations by a Unit or Developer, and the goods sold by a Unit in the Domestic Tariff Area except the goods procured from domestic tariff area and sold as it is;
(b)exemption from electricity duty or taxes on sale, of self generated or purchased electric power for use in the processing area of a Special Economic Zone;
(c)[ allow generation, transmission and distribution of power within a Special Economic Zone.] [Substituted by Notification No. G.S.R. 501 (E), dated 14.6.2010 (w.e.f. 10.2.2006).]
(d)providing water, electricity and such other services, as may be required by the developer be provided or caused to be provided;
(e)delegation of power to the Development Commissioner under the Industrial Disputes Act, 1947 (14 of 1947) and other related Acts in relation to the Unit;
(f)delegation of power to the Development Commissioner under the Industrial Disputes Act, 1947 (14 of 1947) in relation to the workmen employed by the Developer;
(g)declaration of the Special Economic Zone as a Public Utility Service under the Industrial Disputes Act, 1947 (14 of 1947);
(h)providing single point clearance system to the Developer and Unit under the State Acts and rules;
(6)The State Government shall, while recommending a proposal for setting up of Special Economic Zone to the Board, indicate whether the proposed area falls under reserved or ecologically fragile area as may be specified by the concerned authority.
(7)[ The Developer or Co-developer shall have to construct the minimum built up area specified in this rule within a period of ten years from the date of notification of the Special Economic Zone become in which at least fifty percent of such area to be constructed within a period of five years from the date of such notification.] [Inserted by Notification No. G.S.R. 501 (E), dated 14.6.2010 (w.e.f. 10.2.2006).][Provided that the Board of Approval may, upon request in writing by the Developer, and after being satisfied that it is necessary and expedient to do so, grant extension beyond the said period of ten years for a further period of not exceeding one year, at a time, subject to maximum upto ten such extension.] [Inserted by Notification No. G.S.R. 940(E), dated 17.12.2019 (w.e.f. 10.2.2006).]
(8)[ In case of a Special Economic Zone for Information Technology or Information Technology enabled Services, letter of approval shall be issued by the Approval Committee for services, which can be broad-banded with Information Technology or Information Technology enabled Services such as financial services, consultancy services, design services, architect services, commercial training or coaching services.] [Inserted by Notification No. G.S.R. 940(E), dated 17.12.2019 (w.e.f. 10.2.2006).]