Setting up of new trading units in SEZs permitted after withdrawal of prior instruction, subject to SEZ amendment rules.
Instruction No. 5/2006 is withdrawn with immediate effect, removing the departmental hold on setting up new trading units in SEZs; such establishments may proceed subject to compliance with the SEZ (Amendment) Rules and other applicable regulatory requirements, with administrative circulation to the relevant oversight and coordinating bodies.

Overriding SEZ framework ensures SEZ Act and Rules govern excisable goods clearance from the Domestic Tariff Area under specified procedures.
The SEZ Act and SEZ Rules operate as the prevailing legal framework for SEZ activities, overriding inconsistent laws; clearances of excisable goods to SEZs must follow the Rule permitting procurement from the Domestic Tariff Area without payment of central excise, and prior SEZ customs provisions are inoperative. Until Single Agency and enforcement sections are operationalised, existing agencies and officers under relevant statutes will continue to function. Development Commissioners must demarcate processing and non processing areas and may authorize Customs officers to serve as Specified Officers. Improper accountal or non utilization of goods triggers refund of fiscal benefits and other statutory consequences.

Moratorium on new trading unit approvals in Special Economic Zones-proposals to be kept on hold pending further orders.
Proposals for setting up new trading units in Special Economic Zones are to be kept on hold until further orders, continuing prior Department of Commerce instructions; the suspension functions as an interim administrative moratorium on new trading-unit approvals and is circulated to Development Commissioners, the Department of Revenue, the EPC for EOU/SEZ units, and for posting on the SEZ website.

Tax treatment for SEZ trading clarified; tax benefits limited to re export of imported goods, domestic sourcing allowed with undertaking.
SEZ trading units are permitted to carry out all forms of trading activity, but income tax benefits are excluded for trading except trading consisting of re export of imported goods; interim permission to source from the domestic area is allowed if the unit cites this circular and submits an undertaking that no income tax benefits will be claimed for trading other than re export of imported goods.

Authorized operations include construction goods in SEZ unit approvals; Development Commissioner decides eligibility under Rule 27(2).
Authorized operations for SEZ units include setting up, operation, maintenance and expansion and may include goods required for construction of buildings; such goods can be included in the Letter of Approval (Form G). Any question whether goods or services are required for an authorized operation shall be decided by the Development Commissioner under the applicable rules.

Bond-cum-Legal Undertaking execution for SEZ developers clarified: state-issued stamp paper and local notarisation required, compliance emphasized.
Clarifies that the Bond-cum-Legal Undertaking in Forms D and H must be executed on non-judicial stamp paper purchased in the State where the SEZ or unit is located and must be notarised by a Notary Public registered in that State; existing developers/units are directed to execute the undertaking under the SEZ Rules by the applicable compliance date.

Trading restrictions in SEZs: trading units may only import for export and cannot procure from DTA.
Trading units in SEZs must confine trading to imports for export and a proviso shall be added to Form G clauses (i) and (iv) that a Unit having letter of approval for trading shall not procure goods from the DTA; this requirement applies to new proposals and existing trading units, whose letters of approval should be amended accordingly.