Supplies to SEZs for the authorized operations of the SEZ Units are exempted from payment of Central Excise Duties and Service Tax. However rebate for Central Excise Duty paid by DTA supplier on supply of goods to SEZ Units can be claimed from the jurisdictional Central Excise authorities.

The SEZ Act 2005 provides for setting up of a Single Window Clearance Mechanism for speedy implementation of SEZ Projects. Accordingly, the State Governments are expected to take suitable steps to notify the SEZ policy and enact suitable enabling legislation in this regard for their respective States. A few States have enacted their State SEZ Acts.

As per Rule 53 of SEZ Rules 2006 the SEZ units are under an obligation to achieve positive Net Foreign Exchange (NFE) earnings to be calculated cumulatively for a period of 5 years from the commencement of production. Under Rule 53 certain categories of sales/supplies have also been permitted to be counted towards NFE earnings. Value of transactions under such categories are a very small percentage of the total exports made from SEZs. The total exports from the SEZs outside the country and sales to Domestic Tariff Area from SEZs, during the financial years 2009-10 to 2012-13 and first quarter of current financial year (April, 2013 – June, 2013) are as under:

Financial Years	Value of Exports	Supplies which are treated towards positive NFE earnings.	Sales to Domestic Tariff Area	Total Exports	Percentage shared of column III over column V
	(Value in Rs. Crore)
I	II	III	IV	V	VI
2009-10	2,20,711.39	13,937.04	19,200.92	2,53,849.35	5.49%
2010-11	3,15,867.85	29,093.05	13,881.20	3,58,879.07	8.11%
2011-12	3,64,477.73	32,472.70	29,664.83	4,26,615	8%
2012-13	4,76,158.93	27,884.80	27,545.46	5,31,589	5%
2013-14*	1,13,299	8,055.70	7,481.91	1,28,836	6%

* April, 2013 – June, 2013

The contribution of SEZ exports during the last three years and the current financial year are as under:

Financial Year	Physical Exports from SEZs (Value in Rs. Crore)	Growth Rate (over previous year)
2010-2011	3,15,868	43.11%
2011-2012	3,64,478	15.39%
2012-2013	4,76,159	31%
2013-2014	1,13,299 (as on 30th June, 2013)	- 4.25%

 The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. D. Purandeswari in a written reply in the Lok Sabha.

Exemptions for supplies to SEZs allow duty- and service-tax-free authorized operations; DTA suppliers may claim rebate from excise authorities. Supplies to SEZ units for authorized operations are exempt from Central Excise Duty and Service Tax, while DTA suppliers who paid excise on such supplies may claim a rebate from the jurisdictional excise authorities. The SEZ Act envisages a Single Window Clearance mechanism and state-level enabling legislation. SEZ Rules 2006 Rule 53 requires units to achieve positive Net Foreign Exchange earnings cumulatively over five years, with certain limited categories of domestic sales allowed to be counted toward NFE.