Page 60 - Quick Insights Book 2022

Chap. 14 – Special Economic Zones (SEZ)

in an area designated as EHTP Complex. As in the case of STP OFFSHORE BANKING UNITS (OBU)
Scheme, the EHTP Scheme is also administered by the Ministry
of Communications & Information Technology. OBU are virtually foreign branches of Indian banks but located
in India and would be exempt from Cash Reserve Ratio (CRR)
100% EOU SCHEME and Statutory Liquidity Ratio (SLR). The Union Commerce
Minister had first announced the setting up of OBUs in SEZ in
A 100 per cent export-oriented unit is an industrial unit offering the EXIM Policy 2002-07.The terms and conditions subject to
for export its entire production, excluding the permitted levels which an Offshore Banking Unit may be set up and operated
of domestic tariff area sales for manufacture of goods, including in a Special Economic Zone shall be as specified in the
repair, re-making, reconditioning, re-engineering and rendering Notification number FEMA 71/2002- RB dated 7th September,
of services. Trading units are not covered under this scheme 2002 by the Reserve Bank of India, as amended from time-to-
time.
FREE TRADE AND WAREHOUSING ZONES
SOFTWARE TECHNOLOGY PARKS OF INDIA (STPS)
The concept of Free Trade and Warehousing Zones was
introduced by Chapter 7A of the Foreign Trade Policy 2004- Software Technology Parks (STPs) are export- oriented projects
09 on 31st August 2004. Chapter 7A has been deleted in the catering to the needs of software development for exports.
Foreign Trade Policy 2006-07. The Special Economic Zones The present provisions of the STP scheme are contained in
Act 2005 and Special Economic Zones Rules 2006 now apply Chapter 6 of the Foreign Trade Policy 2004-09. The procedures
to FTWZs from 10th February 2006. are included in Chapter 6 of the Handbook of Procedures and
Appendices to the Handbook of procedures issued under the
The scheme envisages creation of world-class infrastructure for Foreign Trade Policy 2004-09. Software Technology Parks
warehousing of various products, state-of-the-art equipment, of India is an autonomous organization under Ministry of
transportation and handling facilities, commercial office-space, Communications and Information Technology, Govt. of India.
water, power, communications and connectivity, with one- New fiscal incentives offered under this scheme, infrastructure
stop clearance of import and export formality, to support the created by STPI and the investor-friendly environment have
integrated Zones as ‘international trading hubs’. These Zones contributed to a steep growth in the Software Exports from
would be established in areas proximate to seaports, airports or India.
dry ports so as to offer easy access by rail and road.
The opportunities for Chartered Accountants
Though no manufacturing activity would be permitted, activities
like repackaging would be permitted in these zones. Advisory / Regulatory Support

INTERNATIONAL FINANCIAL SERVICES CENTRE • Preparation of proposal documentation (preparation of
application in Form A for SEZ developer etc.).
(IFCS)
• Preparation of preliminary SEZ documentation for setting
Financial Centres can be broadly categorized into two:
up units (application in form F, preparation of project
International Financial Centres (IFCs) and Offshore Financial report, business forecast etc.).
Centres (OFCs).
• Application for Import Export Code Number to the
The full potential of an IFC is demonstrated by centres such Directorate General of Foreign Trade.
as New York, London and Singapore where offshore business • Obtaining the letter of permission /renewal of LOP.
is conducted alongside large domestic financial intermediation.
In most cases, offshore activities are not ring- fenced from • Obtaining permissions for movement and transfer of
domestic operations and they usually operate in the same capital goods within the units.
regulatory and fiscal environment. IFCs have a highly matured
and developed economy and sophisticated, deep and liquid • Obtaining permission for disposal of waste and scrap.
domestic markets. • Application for approval of enhancement in production
An Offshore Centre commonly refers to a smaller and less capacity.
mature jurisdiction that attracts capital through a simple • Permission for change in location of unit/additional
regulatory framework, minimum legal requirements for location.
incorporation and operation, favourable tax treatment and
stringent confidentiality requirements. • Assistance in obtaining requisite certification for obtaining
service tax exemption and refund (Form A1, A2, A3 and
The provisions for setting up IFSC are laid down in Section 18 A4).
of The Special Economic Zones Act, 2005.

Quick Insights on Professional Opportunities for Chartered Accountants 47