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Contract Farming 


SEZ units engaged in production/processing of agriculture/horticulture products, may on the basis of annual permission from the Customs authorities take out inputs and equipments (specified at Appendix-14-IJ to the DTA farm subject to the following conditions:

(a) Supply of inputs by the SEZ to the contract farm(s) shall be subject to the input-output norms approved by the DGFT/BOA.

(b) There shall be contract farming agreement between the SEZ and the DTA farmer(s);

(c) The unit has been in existence for at least two years and engaged in export of agriculture/horticulture products; otherwise it shall furnish bank guarantee equivalent to the duty foregone on the capital goods/inputs proposed to be taken out to the Deputy/Assistant Commissioner of Customs/Central Excise till the unit completes two years.

Export Through Exhibitions 


SEZ units may export goods for holding/ participating in exhibitions abroad with the permission of Development Commissioner subject to the following conditions

(a) the unit shall produce to the Customs authorities the letter in original or its certified copy containing approval of the Development Commissioner. For gems and jewellery items, a self-certified photograph of the products shall also be submitted.

(b) in case of re-import, such items on arrival shall be verified along with the export documents before clearance

(c) items not sold abroad shall be re-imported within 60 days of the close of the exhibition. However, in case the exporter is participating in more than one exhibition within 45 days of close of the first exhibition, then the 60 days shall be counted from the date of close of the last exhibition.

(d) In case of personal carriage of goods and for holding/participating in overseas exhibitions, the value of gems and jewellery shall not exceed US $ 2 million

Personal Carriage of gems and jewellery for Export promotion tours 


Personal carriage of gold/silver/ platinum jewellery, cut and polished diamonds, precious, semi-precious stones, beads and articles as samples upto US $ 100,000 for export promotion tours and temporary display/sale abroad by SEZ units is also permitted with the approval of the Development Commissioner subject to the following conditions:

(a) SEZ units shall bring back the goods or repatriate the sale proceeds within 45 days from the date of departure through normal banking channel

(b) The unit shall declare personal carriage of such goods to the Customs while leaving the country and obtain necessary endorsement.

Export through show rooms abroad /Duty Free Shops 


Export of goods is also permitted for display/sale in the permitted shops set up abroad or in the show rooms of their distributors/agents. The items not sold abroad within 180 days shall be re-imported within 45 days.


SEZ unit may set up show rooms/retail outlets at the International Airports for sale of goods in accordance with the procedure laid down by the Customs authorities. The items remaining unsold after a period of 60 days shall be exported or returned to the respective SEZ units.

Personal carriage of Import/Export Parcels including through foreign bound passengers 


Import/ export through personal carriage of gem and jewellery items may be under-taken as per the procedure prescribed by Customs. The export proceeds shall, however, be realized through normal banking channel. Import/export through personal carriage for units , other than gem and jewellery units, shall be allowed provided the goods are not in commercial quantity.


For Personal carriage of goods by foreign bound passenger, the following documents shall be submitted by SEZ units as proof of exports.

(a) Copy of the shipping bill filed by the SEZ units;

(b) A copy of the Currency Declaration Form filed by the Foreign buyer with the Customs at the time of his arrival;

(c) Foreign Exchange Realisation/ Encashment Certificate from the Bank; and

(d ) Personal carriage of parts by foreign bound passenger shall also be allowed in case the same are required for repairs of exported goods at customer site. The following documents shall be submitted as proof of export:

(i) permission letters from Customs for exports.

(ii) Invoice with value (for payment or free of charge).


In addition to this, Personal Carriage by foreign bound passenger on Document Against Acceptance (DA)/Cash On Delivery (COD) basis is also allowed. The SEZ units will have to furnish the following documents as proof of export.

(a) Copy of Shipping Bill.

(b) Bank Certificate of Export and Realisation.


The procedure for personal carriage of import parcels will be the same as for import of goods by airfreight except that the parcels shall be brought to the Customs by the SEZ unit/ foreign national for examination and release. Instructions issued by the Customs authorities in this regard should be followed mutatis mutandis.

Export/Import by Post / Courier


Goods including free samples, may be exported/imported by airfreight or through Foreign Post Office or through courier subject to the procedures prescribed by Customs.

Replacement/ Repair of Goods 


The general provisions of Policy relating to export of replacement/ repaired goods shall apply equally to SEZ units, save that, cases not covered by these provisions shall be considered on merits by the Development Commissioner.


The units may send capital goods abroad, for repair and return. Any foreign exchange payment for this purpose will also be allowed.


The goods sold in the DTA and to be defective may be brought back for repair or replacement under intimation to the Development Commissioner.


Goods or parts thereof, on being imported/ indigenously procured and found defective or otherwise unfit for use or which have been damaged or become defective after import/ procurement may be returned and replacement obtained or destroyed. In the event of replacement, the goods may be brought back from the foreign suppliers or their authorised agents in India or the indigenous suppliers. However, destruction shall not apply to precious and semi-precious stones and precious metals.


Goods may be transferred to DTA/abroad for repair/ replacement, testing or calibration, quality testing and R & D purpose under intimation to Customs authorities and subject to maintenance of records.


SEZ units may transfer goods for quality testing/R & D purpose to any recognized laboratory/ institution, upto Rs 5 lakhs per annum without payment of duty, on giving suitable undertaking to the customs for return of the goods. However, if the goods have been consumed/destroyed in the process of testing etc. a certificate from the laboratory/ institution to this effect shall be furnished to the Customs.



SEZ units may, on the basis of records maintained by them, and on prior intimation to Customs authority supply or sell samples in the DTA for display/market promotion on payment of applicable duties.


SEZ units may also remove samples to DTA without payment of duty under prior intimation to the Customs authorities subject to the condition that the goods shall be brought back within a stipulated period.


SEZ units may export free samples, without any limit, including samples made in wax moulds, silver mould and rubber moulds through all permissible mode of export including through couriers agencies/post.

Sale of unutilized material/destruction


In case a SEZ unit is unable, for valid reasons, to utilize the goods, and services, imported or procured from DTA, it may be transferred to other EOU/SEZ/EHTP/STP units or disposed off in the DTA on payment of applicable duties and submission of import license by DTA unit, wherever applicable or exported. Such transfer from SEZ unit to another SEZ/EOU/EHTP/STP unit would be treated as import for the receiving unit.


Capital goods and spares that have become obsolete/surplus may either be exported, transferred to another SEZ/EOU/EHTP/STP unit or disposed of in the DTA on payment of applicable duties. The benefit of depreciation, as applicable will be available in case of disposal in DTA.


SEZ unit may be allowed by Customs authorities concerned to donate imported/ indigenously procured (bought or taken on loan) computer and computer peripherals, including printer, plotter, scanner, monitor, key-board and storage units without payment of duty, two years after their import/procurement and use by the units, to recognized non-commercial educational institutions, registered charitable hospitals, public libraries, public funded research and development establishments, organisations of the Government of India or Government of a State or Union Territory as per Custom/ Central Excise notification issued in this regard.


No duty shall be payable in case capital goods, raw material, consumables, spares, goods manufactured, processed or packaged and scrap/waste/ remnants/rejects are destroyed within the Zone after intimation to the Custom authorities or destroyed outside the Zone with the permission of Custom authorities. Destruction as stated above shall not apply to gold, silver, platinum, diamond, precious and semi precious stones.



All activities of SEZ units within the Zone, unless otherwise specified, including export and re-import of goods shall be through self certification procedure.

Distinct identity


If an industrial enterprise is operating both as a domestic unit as well as an SEZ unit, it shall have two distinct identities with separate accounts, including separate bank accounts. It is, however, not necessary for it to be a separate legal entity, but it should be possible to distinguish the imports and exports or supplies effected by the SEZ units from those made by the other units of the enterprise.

Powers of Units Approval Committee 


The powers and functions of the Unit Approval Committee notified by the Government

(Appendix-14-IIR) shall be as under:

(a) To consider the applications for setting up of units in SEZ other than proposals for setting up of unit in the services sector (except R&D, software and IT enabled services, trading or any other service activity as may be delegated by the BOA) and items of manufacture requiring industrial licence under the Industrial (Development & Regulation) Act, 1951 shall be considered by the BOA;

(b) To consider and permit conversion of EOU into SEZ unit;

(c) to monitor the performance of the Units;

(d) to supervise and monitor permission, clearances, licences granted to the units and take appropriate action in accordance with law;

(e) to call for information required to monitor the performance of the unit under the permission, clearances, licence granted to it;

(f) to perform any other function delegated by the Central Government or its agencies.

(g) to perform any other function delegated by the State Governments or its agencies; and

(h) to grant all approvals and clearances for the establishment and operation of Units in the Special Economic Zone.

Management of SEZ 


SEZ will be under the administrative control of the Development Commissioner

Registration-cum-Member-ship Certificate 


Registering authority for SEZ units and SEZ developers, shall be the Development Commissioner of the SEZ concerned. A separate Registration-cum-Membership Certificate shall not be required in their cases as provided for in the Policy.

Powers of the Development Commissioner 


Apart from the original power delegated elsewhere, the Development Commissioners of SEZ will exercise the following powers in respect of SEZ units. Jurisdiction of Development Commissioners is given in Appendix-14-IK.

Importer-Exporter Code No. 

(a) allot Importer-Exporter code number for SEZ units and SEZ developer.

(b) Approve all matters relating to post approval operation of the unit including import/procurement of additional capital goods, increase in value of capital goods on account of foreign exchange rate fluctuations, enhancement of production capacity, broad banding/diversification, change in name of the company or the implementing agency and change from a company to another provided the new implementing agency /company undertakes to take over the assets and liabilities of the existing unit and merger of two or more SEZ units.

(c) Cancel LOP/ LOI/IL wherever warranted.

(d) Adjudication under Section 13 read with Section 11 of Foreign Trade (Development & Regulation) Act, 1992 in respect of SEZ units.

(e) Action under the Public Premises Eviction Act in case the rent on the plot/built up premises allotted to the units is in arrears or if the plot/shed is not utilised for the purpose for which the same has been allotted.

(f) Valuation of exports declared on SOFTEX form by the units located in Special Economic Zones.

(g) Issuing eligibility certificates for grant of employment visa to low level foreign technicians to be engaged by SEZ units.

(h) Issue of Green Card after execution of Legal Undertaking by the unit.

(i) Import of second hand capital goods without age restrictions.

(j) Grant/renew Status Holder Certificate in respect of SEZ units provided it does not involve clubbing of FOB value of exports of its parent company in the DTA.

Exit from SEZ scheme 


SEZ unit may opt out of the scheme with the approval of the Development Commissioner. Such exit from the scheme shall be subject to payment of applicable Customs and Excise duties on the imported and indigenous capital goods, raw materials etc. and finished goods in stock. In case the unit has not achieved positive NFE, the exit shall be subject to penalty, that may be imposed by the adjudicating authority under Foreign Trade (Development and Regulation) Act, 1992.


Broad conditions governing exit of units from the SEZ scheme are indicated at Appendix-14-IL.


In the event of a gem and jewellery unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by the Ministry of Commerce and Industry (Department of Commerce) at the price to be determined by that agency.


SEZ unit may also be permitted by the Development Commissioner, as one time option, to exit from SEZ scheme on payment of duty on capital goods under the prevailing EPCG Scheme, subject to the unit satisfying the eligibility criteria of that Scheme and standard conditions, as per paragraph above.

Depreciation norms for Capital goods 


The depreciation upto 100% is permissible for computer and computer peripherals in 5 years and in case of others capital goods in 10 years, as per the norms notified by the Department of Revenue.


Depreciation for computers and computer peripherals shall be as follows:

10% for every quarter in the first year,

8% for every quarter in the 2nd year,

5% for every quarter in the 3rd year

1% for every quarter in the fourth and fifth year.


For capital goods, other than the above, the depreciation rate would be as follows:-

4% for every quarter in the first year;

3% for every quarter for the second and thrid year;

2.5% for every quarter for the fourth and fifth year; and

2% for every quarter thereafter.


Clearance of capital goods, including second hand, in DTA shall be allowed as per the Policy under EPCG Scheme. In other cases, clearance in DTA may allowed on payment of applicable duty and import policy in force on the date of such clearance.

Revival of Sick units 


Subject to a unit being declared sick by the appropriate authority, proposals for revival of the unit or its take over may be considered by the Board of Approval as per guidelines in Appendix-14-IM

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