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Ministry Puts SEZ Units, Developers On Notice With Law ChangeBy ugesh sarkar, Section Finance & Taxes
Units and developers of Special Economic Zones (SEZ) will no longer be able to get away after breaking the rules on export-import and related transactions by citing the absence of notified provisions in force in the SEZ Act on punishments and penalties.
The Commerce and Industry Ministry, in-charge of SEZs, has plugged this loophole through a recent notification that says the acts or omissions punishable under the notified offences for the purposes of the SEZ Act also, the Business Line has reported. According to an official, "While most SEZ units and developers comply with the laws, a few clever ones could have cited the absence of notification of these penal provisions in the SEZ Act to escape punishment. This loophole has been addressed through the recent notification." The FTDR Act is the parent legislation that sets out punitive actions for violating foreign trade rules. The Act automatically applies to all the products of the Foreign Trade Policy, like the export-oriented units, while the SEZ is the product of a separate legislation, the SEZ Act, the official said. Source: Realty Plus Ministry puts SEZ units, developers on notice with law change Click On "Full Story" For More...
However, the January 13 notification brings SEZs also under the ambit of FTDR Act for the purpose of offences. Also, through another notification on the same day, the Ministry has authorised the Development Commissioner of the each SEZ to be the enforcement officer in respect of the notified offences committed in that Zone. These notifications mean that the Importer-Exporter Code Number and licence of those in SEZs can be suspended or cancelled if they are found guilty of contravening any trade-related laws, including the SEZ Act, the report added.
The violations include delaying payments of fiscal penalties, evading taxes and duties. They also include the offence of failing to achieve the positive net foreign exchange (NFE) requirement, which stipulates that exports from SEZs and its units should be more than their imports. The transactions covered will include those between SEZs, between units in an SEZ, those involving SEZs and the domestic tariff area (area outside SEZs but within the country where all the taxes and duties are applicable) and well as exports from SEZs and imports into SEZs, it said.
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