Punjab clears much-awaited SEZ Bill

Punjab clears much-awaited SEZ Bill
The Economic Times, July 13, 2009, Page 15

Chandigarh:

With the SAD-BJP government clearing the much-awaited Punjab Special Economic Zones Bill, 2009, the decks have been cleared for developers to give a major boost to the development of the Special Economic Zone’s (SEZ’s) in the state.

As per the norms laid down in the policy, the requirement of areas for setting up SEZs in case of a multi product SEZ is 1,000 hectare, product-specific 100 hectare, IT-specific 10 hectare and warehousing 40 hectare. Speaking about the policy, state industries & commerce minister Manoranjan Kalia said due to paucity of land and high cost in the state, the government has asked the Centre for relaxation in the aforementioned norms and has also sought permission for development of SEZs as per viability of the project, to be determined by the developer.

Although the new industrial policy is yet to get the Cabinet’s approval, Punjab has now become the 6th state in the country after Haryana, Gujarat,West Bengal, Maharashtra and Madhya Pradesh to enact the SEZ Act.

The Punjab Act is little different from the SEZ Acts in other states, as it provides exemption from payment of any tax, duty, fee, cess or any other levy, whereas the Acts of Gujarat and Maharashtra specify exemption from sales tax, VAT, motor spirit tax, luxury tax, entertainment tax, purchase tax and other state taxes. These exemptions under Punjab Act will be on export or import of goods in SEZ, inter-unit transaction in SEZ, movement of goods in SEZ for value addition and on any service to SEZ developer or unit. All SEZ units will also be given public utility status. Moreover, the Punjab Act will provide exemption from stamp duty, registration fee and social security cess on purchase of land for SEZ and on first transfer or lease of immovable property within SEZ for industrial, commercial or residential purposes. The allocation and transfer of land within the SEZ can be done only by way of sale or lease as per the Punjab Act.

While referring to the over all SEZ scenario, Mr Kalia said that the Centre has given formal approvals to 578 projects in the country, out of which seven are from Punjab. Among the 322 notified SEZs, two are in Mohali - QuarkCity India for IT industry and Ranbaxy Laboratories SEZ in the pharma sector.

The total investment envisaged in the SEZs projects on all India basis comes to Rs 1,08,903 crore while the 18 projects to come up in Punjab would entail an investment of Rs 10,182 crore. “QuarkCity would cover an area of 13.75 hectare with a proposed investment of Rs 500 crore and give employment to some 27,500 people, whereas the Ranbaxy Labs SEZ would cover 32 hectare with an investment of Rs 265 crore,” said Mr Kalia.

In order to make the clearance of projects more convenient and hassle free, the state government has made a single-tier approval system instead of two-tier process. A project approval committee headed by the chief secretary, along with administrative secretaries concerned will look after all the SEZ proposals in Punjab. The committee will give in-principle approval, if land is not in possession of the developer and will grant final approval after land possession. After approval by the committee, the proposal will be sent to the Centre. The SEZ Act also provides permission for generation of electricity in or outside SEZ for consumption of units in SEZ, whereas in other states, generation of electricity is allowed only within SEZ. There will be no electricity duty on generation, transmission, distribution and consumption of electricity within SEZ. The state government will also notify the SEZ after approval by the Centre. The SEZ developer will prepare the development plan of SEZ in accordance with the development plan or master plan of the area, where SEZ is to be located.

Mr Kalia further said that the Act enables the SEZ developer to demarcate the sites for industrial, commercial, residential and other purposes in SEZ and also let them free to fix the rates for transfer of land/building within the SEZ to the units. The Act allows the developer to maintain the SEZ and also empowers them to levy charges for maintenance. However, the developer will have to pay the charges to local authority in case its services are utilised. SS Channy, industries & commerce secretary, said that with the implementation of Punjab SEZ Act, the road is clear for proposed 18 SEZs to set up their ventures in the state. This will give boost to rapid industrialisation and will also attract more SEZs in Punjab. He pointed out that Punjab Industrial Facilitation Act, 2005, providing single-window clearance in a time bound manner with the provision of deemed clearance if approval is not granted in the notified time schedule, will also be applicable in the SEZs.