Taxability of co-developer lease proceeds clarified: administrative approvals do not prevent tax assessment by authorities.
Approval by the Board of Approval for lease terms, down payments, premiums or other receipts from co-developers does not affect their tax treatment; the Assessing Officer may examine and determine the taxability of such amounts under the Income Tax Act notwithstanding any BoA approval.

Administrative segregation in SEZ ports ensures separate handling and Customs control for DTA and SEZ cargo.
Ports within SEZs must be located in the non processing area and jointly demarcated by the Development Commissioner and jurisdictional Customs Commissioner, with separate secured entry/exit routes and storage to prevent mixing of SEZ and DTA cargo. SEZ cargo is handled by an authorized SEZ officer under SEZ Act/Rules, while DTA export/import cargo and related port functions including assessment and clearance are performed by an authorized Customs formation. The Customs Act and its rules apply to the demarcated port area.

Boundary wall height standards set discretionary DC authority for IT/ITES zones and specified options for other SEZs.
Guidelines prescribe boundary wall standards for SEZs: Development Commissioners determine wall height in IT/ITES SEZs; other SEZs are to follow the prescribed option of a taller solid wall or a lower wall with barbed wire augmentation; deviations must be referred to the Board of Approvals.

SEZ area modification procedures require DC verification and prescribed forms for additions and denotifications.
Requests to change SEZ area must be routed via the Development Commissioner with increases filed on Form Q and denotifications on Form R. The Development Commissioner must verify possession/ownership, non encumbrance, contiguity and vacancy for additions, and contiguity, vacancy, duty free benefits/exemptions and units/NOCs for de notifications. Modifications to non notified SEZs may be approved on file; changes to notified SEZs go to the Board of Approval. Minimum area requirements apply and reductions below prescribed minimums require higher level referral.

Foreign Direct Investment: promoter must retain majority shareholding under automatic SEZ route; reductions need prior Board approval.
SEZ policy permits 100% FDI on the automatic route, subject to a continuing majority shareholding requirement by the promoter; any proposal to reduce promoter shareholding below the majority threshold must obtain prior approval of the Board of Approvals before the reduction is effected.

Extension of in-principle approvals: grant subject to timely filing, implementation steps, and sectoral land thresholds.
A first extension of one year for in-principle approvals may be granted if the request was filed before LoA expiry and implementation steps like land acquisition have been taken; area approvals above 5000 hectares must be capped at 5000 hectares. Sector-specific rules govern a second extension: none for certain IT/ITES and similar SEZs; for other sector-specific SEZs developers must have sixty percent land acquisition/possession, and for multi-product SEZs fifty percent; non-complying cases go to the Board of Approvals. Amendment to allow further extension for multi-product SEZs is under process.

Transfer of SEZ approvals clarified into defined categories; transfers now governed by documentation and approval rules
Guidelines classify transfers of In-principle or Formal SEZ approvals into four categories-change of name without shareholding change; transfer to a wholly owned subsidiary or 100% SPV; court-ordered de merger; and transfers involving partial State ownership-and set these categories as the prospective framework for approval transfers. Applications must include the shareholding pattern at approval and after transfer. Cases outside these categories will be decided by the approval authority, and the Department will consult the revenue department to frame separate policy for other scenarios.

Default authorized operations allow developers to commence specified SEZ infrastructure works duty free upon notification.
Default authorized operations allow a Developer or approved Co Developer to carry out specified infrastructure and processing area activities in an SEZ from the date of notification and the Development Commissioner/Unit Approval Committee may permit supply of duty free material for these default activities. Distinct default lists are provided for IT/ITES/Biotech/Gems & Jewellery, Sector Specific, and Multi Product SEZs covering roads, water and sewage systems, electrical and fuel distribution, communications, effluent treatment where applicable, landscaping, processing/factory sheds, and limited office space for Customs and security. Activities beyond the default list require a separate detailed application to the Board of Approval.

DEPB claims jurisdiction: zonal Development Commissioners to handle SEZ claims; local DCs may forward recommendations.
Responsibility for DEPB claims from SEZs is assigned to the jurisdictional Zonal Development Commissioners; SEZ Development Commissioners may forward received claims with their recommendation to the appropriate Zonal Development Commissioner for final handling, and an annexure lists each Zonal DC with the States under its jurisdiction to define geographical administrative responsibility.

Stamp duty exemption for SEZ transactions: States may exempt or refund duty on land linked to SEZ approvals.
An amendment via the SEZ Act exempts from stamp duty instruments executed by, on behalf of, or in favour of SEZ Developers or Units for SEZ purposes. Guidelines clarify that land acquired after formal approval should receive full exemption; acquisitions after in principle approval may be exempted or refunded; acquisitions before in principle approval require upfront payment with possible refund on notification. Exemptions apply only to land and transactions within the notified SEZ; outside SEZ purchases, sales or conveyances do not qualify, and States may recover duty if SEZ is not commissioned or notification is cancelled.

Jurisdictional recordkeeping and inspection duty requires Zonal Development Commissioners to retain SEZ original files and conduct pre-notification inspections.
All original files and papers relating to SEZs, including IT/ITES SEZs, must be maintained by the Zonal Development Commissioner, and the jurisdictional Zonal Development Commissioner must carry out inspections and prepare reports for SEZs until such SEZs are formally notified.

Special Economic Zone approval validity extends after operationalisation, with Letters of Approval remaining effective until suspension or revocation.
A Special Economic Zone is operational once exports start. Once operational, the Letter of Approval issued to the developer remains valid beyond the prescribed implementation date in the Letter and continues until it is suspended or revoked.

Reimbursement of duty in lieu of drawback: zonal development commissioners to sanction claims from allocated DBK and CST budgets.
Reimbursement of duty in lieu of drawback claims for supplies to SEZ developers shall be sanctioned by the Zonal Development Commissioner from the budget allocated to his office for DBK and CST claims; the Annexure lists zonal jurisdictions. Zonal Development Commissioners must inform the Under Secretary (EOU Division), Department of Commerce of any additional fund requirements for these reimbursements.

Single window mechanism centralises SEZ clearances, requiring zonal committees, zonal DC coordination, and BOA placement.
The Single Window Mechanism establishes zone, state and central coordination: Approval Committees at zone level must meet regularly, review development and pending approvals, and use video-conferencing; Zonal Development Commissioners act as single interfaces to State Single Window Committees, compile pending matters, convene periodic meetings, nominate Development Officers to facilitate State clearances; GOI requires matters from other departments be routed to Department of Commerce for placement before the Board of Approval and mandates prompt transmission of items following UAC meetings.

Shift-based leasing in IT/ITES SEZs permitted; developers must allocate unit storage and contract per shift, treated as export.
Permits shift-to-shift leasing by SEZ developers in IT/ITES SEZs where each unit must have allocated storage in its name and developers contract with units for individual shifts; units must remove and keep procured goods in their allocated space. Establishment of Disaster Management/Recovery Centres by foreign companies in IT/ITES SEZs is allowed irrespective of local manning, and payments for those services are export receipts.

Export/import authorization required for movement of active pharmaceutical ingredients between SEZs, DTA, and foreign territory.
The Instruction clarifies that the NDPS Act's definitions of "export from India" and "to import to India" apply only to movements between India and places outside India; therefore export/import authorisation is required only for Active Pharmaceutical Ingredients when moving from a SEZ to outside India, from outside India into a SEZ, or for sale in the Domestic Tariff Area, and not for movements that remain within India.

Procurement of used capital goods for SEZ units requires prior approval and income tax compliance to permit transfers.
SEZ units may procure second hand capital goods from the DTA only if transfers satisfy subsection four of Section 10AA read with the Explanations to subsection three of Section 80IA; units must obtain prior approval from the Development Commissioner, compute depreciated values using Income Tax Act rates, ensure the aggregate value of DTA procured used goods does not exceed a twenty percent threshold to retain tax benefits, and disclose such procurements in the Annual Performance Report.

Removal of used packing materials allowed duty-free to DTA for SEZ developers under applicable SEZ procedural rules.
Removal of used packing materials from a Special Economic Zone to the Domestic Tariff Area is permitted without payment of duty, except for metal containers, under Rule 49(4)(b). By operation of Rule 14, the procedures and benefits applicable to units apply mutatis mutandis to developers, and therefore the duty-free removal entitlement for used packing materials extends to SEZ developers as well.

Power generation in SEZs: setup and supply rules define fiscal benefits, NFE treatment, licensing and tariff obligations.
Developer/co developer power plants in SEZ non processing areas receive fiscal benefits only for initial setup and need not meet NFE; they may supply SEZ processing and non processing constituents, other SEZs and DTA. Processing area units and standalone plants are entitled to full fiscal benefits including duty free imports counted toward NFE. Distribution is a licensed activity under the Electricity Act, tariffs are governed by the Act, supplies to non processing areas or DTA may attract customs duty, separate metering and quarterly reporting are required, and distribution licensing follows State recommendation and SEZ Act notification.

SEZ port cargo segregation: customs formation handles DTA cargo while authorized SEZ officers manage SEZ cargo clearance.
Ports within SEZs must be demarcated from processing areas and provide separate secured routes and storage for SEZ and DTA cargo. DTA export/import cargo will be handled and cleared by a custom formation authorized by CBEC under the Customs Act, 1962, including vessel entry, rummaging, preventive control, accountal, port clearance and transshipment, while identified SEZ cargo will be handled, assessed and cleared by the authorized officer under the SEZ Act/Rules.