• Any private/public/joint sector company, State Government, or State Government agency can set up a Special Economic Zone (SEZ).

  • "Special Economic Zone for multi-product" means a SEZ where units may be set up for manufacture of two or more goods in a sector OR goods falling in two or more sectors or For Trading & Warehousing or Rendering of two or more services in a sector or services falling in two or more sectors According to the rules prevailing at the time of writing, the SEZ should have a minimum area of 1000 hectares (unless it is a product-specific SEZ or port/airport based SEZ) and at least 50% of the area should be earmarked as industrial area.

  • Special Economic Zone for specific sector" means a SEZ meant exclusively For one or more products in a sector OR For one or more services in a sector

    • Single window clearance for Central and State level approvals.

    Customs and Excise

    • Duty free import (or domestic procurement), without any license or specific approval, of capital goods, raw materials, consumables, spares, packing materials, office equipment, and anything else required for implementation of their project in HBS Pharma SEZ


    • Generous 5 year period for utilization of goods imported duty-free or goods procured locally


    • Exemption of domestic sales from Special Additional Duty (SAD)


    • Domestic sales of finished products or by-products, on payment of the applicable Customs duty


    • Domestic sales of rejects, waste and scrap, on payment of the applicable Customs duty


    Income Tax

    • Physical export benefit


    • 100% exemption from Income Tax under Sec 10A of the Income Tax Act, ---, for the first 5 years, and 50% exemption for the next 5 years


    • Exemption from minimum alternate tax under section 115JB of the Income Tax Act.


    • Reinvestment allowance of up to 50% of ploughed back profits for next 5 years


    • Carry forward of losses to the next financial / accounting year


    Foreign Direct Investment (FDI)

    • 100% FDI under the automatic route is allowed in HBS Pharma SEZ units in the manufacturing sector, except in the following areas: arms and ammunition, explosive, atomic substance, narcotics and hazardous chemicals, distillation and brewing of alcoholic drinks and cigarettes, cigars and manufactured tobacco substitutes


    • There is no cap on foreign investments for items reserved for small scale industries


    Banking / Insurance / External Commercial Borrowings

    • Setting up of Off-shore Banking Units (OBU) is permitted in HBS Pharma SEZ


    • OBUs are allowed 100% Income Tax exemption on profits for 3 years and 50% exemption for the next two years


    • External commercial borrowings by SEZ units, up to $500 million a year, is allowed without any restrictions on maturity - for details please refer to guidelines issued by the Reserve Bank of India (F.No. 4(2)/2002-ECB, dated 15.9.2002)


    • Entrepreneurs have freedom to bring in export proceeds without any time limit


    • SEZ units can keep 100% of export proceeds in an EEFC (Exchange Earner Foreign Currency) account and make overseas investment from this account


    • Commodity hedging is permitted


    • SEZ units are exempt from the interest surcharge on import finance


    • SEZ units are allowed to write-off unrealized export bills


    Central Sales Tax Act

    • SEZ units are exempt from paying Central Sales Tax on sales made from Domestic Tariff Area to other SEZ units


    Service Tax

    • SEZ units are exempt from Service Tax


    Environment

    • SEZ units are exempt from public hearing under Environment Impact Assessment Notification


    • HBS Pharma SEZ is providing a CETP for industries whose effluent needs to be treated


    Companies Act

    • Directors of SEZ units do not have to fulfill the requirement of 12 months domicile in India prior to appointment as Director


    Sub-Contracting/Contract Farming

    • SEZ units are allowed to sub-contract part of their production to units in the Domestic Tariff Area or to other Export Oriented Units or SEZ units


    • SEZ units may also sub-contract part of their production abroad



  • Labour laws of state of Gujarat (in which HBS Pharma SEZ is located) apply to HBS Pharma SEZ, and these are enforced by the State Government but a separate relaxed labour policy has been promulgated for Gujarat SEZ's. ic.gujarat.gov.in/Ind_guj/export_sez.html

  • Supplies from Domestic Tariff Area (DTA) to SEZ are treated as exports. Please see www.cbec.gov.in for updated information on this matter. At the time of hosting, DTA supplies to SEZ are entitled to:

    • Drawback / Duty entitlement passbook(DEPB); Advance License / DFRC


    • Exemption from all State & Central Taxes / levies


    • Income Tax benefits as applicable to physical exports under Section 80 HHC of the Income Tax Act.

  • Handbook of Procedures, Vol. 1 and Vol. 2, published under the provisions of the paragraph 2.4 of the SEZ Policy, details the obligations of a unit to be set up within an SEZ. Some of the key factors are:

    • SEZ units have to achieve net positive foreign exchange earning as per the formula given in paragraph Appendix 14-II (para 12.1) of the handbook mentioned above. A legal undertaking to this effect has to be given by the unit to the Development Commissioner


    Net Foreign Exchange inflow - Net Foreign Exchange outflow > 0

    • SEZ units have to provide periodic reports to the Development Commissioner and Zone Customs as provided in Appendix 14-I F of the Handbook of Procedures, Vol. 1


    • SEZ units have to execute a bond with the Zone Customs for their operations in the SEZ


    • Any company set up with Foreign Direct Investment (FDI) has to also be incorporated under the Indian Companies Act to operate in India.



  • The Development Commissioner (DC) is the nodal officer for SEZs. He is mandated to assist in the resolution of problems faced by the SEZ developer or the units in the SEZ. DC of HBS Pharma SEZ has already been appointed & is available in HBS Pharma SEZ.

  • The following features given to the units in HBS Pharma SEZ, a competitive advantage over those in most other SEZs of India:

    • HBS Pharma SEZ is one of India's largest Pharma SEZs, having an area of 312 acres.


    • HBS Pharma SEZ is executing an excellent social infrastructure, making it easier to attract and retain employees by fulfilling Living, & Recreational requirements.


    • HBS Pharma SEZ will provide all utilities including Power, Water & Effluent treatment through in-zone facilities.
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