Financial Daily from THE HINDU group of publications
Tuesday, Apr 06, 2004
Industry & Economy
SEZ scheme implementation deferred by a month
New Delhi , April 5
THE Finance Ministry has yet again postponed the implementation of the much-touted `Special Economic Zone' (SEZ) scheme by a month.
The Revenue Department has now specified that the customs duty exemption on imports made by a SEZ developer or by units within a SEZ would come into force only from May 1 this year. This exemption was earlier expected to come into effect from April 1.
Further, the excise duty exemption on goods supplied from the domestic tariff area (DTA) to the units within the SEZ will also be available only from May 1 as against April 1.
A Revenue Department official said that there are still some differences between the Commerce Ministry and the department over the implementation of the scheme. ``The modalities are being worked out and we expect the Chapter XA of the Customs Act to be operationalised from May 1,'' the official said.
Special provisions relating to SEZs were inserted in the Customs Act through the Finance Act, 2002, by creating a new Chapter XA. These provisions were to be brought into operation from a date to be notified. Till now, the Chapter XA of the Customs Act pertaining to the SEZ scheme has not been brought into operation.
However, this is not the first time that the implementation of the SEZ scheme has been pushed forward to a later date.
Although the Revenue Department had, in July 2003, come up with necessary notifications for according duty exemptions on various types of transactions with SEZs, sources highlighted that their implementation date was being postponed from time to time.
``Initially, the notifications were to come into effect on August 15 last year, then the date was shifted to October 15. Then again, the Revenue Department specified December 1 as the date from which the scheme would come into force. These have been again postponed to January 1, 2004, March 1, April 1 and now May 1,'' an industry official said.
It may also be recalled that the Finance Ministry had, in early February this year, directed its customs field formations to initiate recovery action in cases wherein duty entitlement passbook (DEPB) benefits were extended on supplies made by the DTA units to the SEZs.
The Revenue Department had then pointed out that the benefit of the DEPB scheme does not become legally available in respect of supplies made by DTA units to SEZ units until Chapter XA of the Customs Act is operationalised.
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