Minutes of the 54th meeting of the SEZ Board of Approval held on 14th September 2012 to consider proposals for setting up Special Economic Zones and other miscellaneous proposals

Minutes of the 54th meeting of the SEZ Board of Approval held on 14th September 2012 to consider proposals for setting up Special Economic Zones and other miscellaneous proposals

The fifty fourth (54th) meeting of the SEZ Board of Approval (BoA) was held on 14.09.2012 under the chairmanship of Shri S.R. Rao, Secretary, Department of Commerce, at 10.30 A.M. in Room No. 47, Udyog Bhawan, New Delhi, to consider proposals for setting up of Special Economic Zones (SEZ) and other miscellaneous requests in respect of notified/approved SEZs. The list of participants is annexed (Annexure -1).

2. Addressing the Board of Approval members, the Chairman informed that so far 588 formal approvals have been granted for setting up of SEZs out of which presently 386 stand notified. He further informed that as on 30.06.2012, over Rs. 2,13,605.54 crores have been invested in the SEZs and direct employment of 9,20,243 persons has been generated in the SEZs. During the financial year 2011-12, total exports to the tune of Rs. 3,64,477.73 crores have been made from the SEZs, registering a growth of about 15.39% over the exports for the year 2010-11. Exports in the current financial year for the first quarter i.e. up to 30.06.2012, have been to the tune of Rs. 1,18,321.56 crores registering a growth of about 64% over the exports of the corresponding period of FY 2011-12.

Item No. 54.1: Proposals for setting up of SEZs.

(i) Proposal of M/s. Cybercity Builders & Developers Private Limited, for setting up of a sector specific Special Economic Zone for IT/ITES at Balanagar Mandal, Kukatpally Municipality, Greater Hyderabad Municipal Corporation, Andhra Pradesh, over an area of 10.12 hectares.

The proposal was withdrawn by the developer.

Item No.54.2: Requests for co-developer

All BoA sanctioned approvals to co-developers are subject to the condition that particular terms and conditions of lease agreement/co-developer agreement will not have any bearing on the treatment of the income by way of lease rentals/down payment/premium etc., for the purposes of assessment under the prevalent Income Tax Act and Rules. The Assessing Officer, will have the right to examine the taxability of these amounts under the SEZ Act and Income Tax Act as applicable. This is applicable to all the cases of co-developers approved by the BoA in this meeting. The Board further directed that proposals for grant of codeveloper status should be accompanied by lease deed/draft lease deed which must inter-alia contain the details of financial transactions/arrangements between developer and proposed co-developer. The decisions of the proposals are as under:-

(i) Request of M/s. Pritech Projects for co-developer in the sector specific SEZ for IT/ITES at Ballandur village, Varthur Hobli, Bangalore East Taluka, Bangalore Urban District, Karnataka, being developed by M/s. Primal Projects Limited

The Board considered the report of DC CSEZ submitted before it as per its direction in the last meeting and after deliberations, the Board approved the request of M/s. Pritech Projects for becoming a co-developer in the above mentioned SEZ, for development of infrastructure over an area of 2.023 hectares in accordance with the co-developer agreement entered into with the developer.

(ii) Request of M/s. A2Z Online Services Private Limited for co-developer in the sector specific SEZ for IT/ITES at Village-Kharadi, Taluka Haveli, Pune, Maharashtra, being developed by M/s. Eon Kharadi Infrastructure Private Limited

The request was deferred as representative of CBDT pointed out that the financial details of the proposed agreement had not been provided for examination.

Item No.54.3: Requests for Authorized Operations

(i) Request of M/s. DLF Assets Private Limited, a co-developer in the sector specific SEZ for IT/ITES at Gachibowli, Hyderabad, Andhra Pradesh, being developed by M/s. DLF Commercial Developers Limited

The representative of CBEC raised objections on the authorized operations stating that such activities are not meant to be carried out in the processing area. It was pointed out that similar requests had been approved by the Board in the past as they were permitted under the norms. Furthermore the developer had submitted that no tax/duty concessions would be availed by it for such authorised operations. However in view of CBEC’s objections to the proposal the Board after deliberations deferred the request.

(ii) Request of M/s. Satyam Computer Services Limited, a co-developer in the sector specific SEZ for IT/ITES at Kancheepuram, Chennai, Tamil Nadu, being developed by Electronic Corporation of Tamil Nadu Limited (ELCOT)

The Board observed that such activities are not permitted in the processing area. The Board, therefore, rejected the request of the co-developer.

(iii) Request of M/s. G.P. Realtors Private Limited for authorized operations in sector specific SEZ for IT/ITES at village Behrampur, District Gurgaon, Haryana

(iv) Request of M/s. G.P. Realtors Private Limited for authorized operations in sector specific SEZ for IT/ITES and Electronic Hardware at village Behrampur, Balola and Bandhwari, District Gurgaon, Haryana

DC, NSEZ informed that Board that the developer has yet to start development of the processing area of the SEZs. The Board observed that the requests for authorized operations are pre-mature and accordingly, the proposals were deferred.

Item No. 54.4: Request for increase/decrease in area

(i) Request of Andhra Pradesh Industrial Corporation Limited (APIIC) for denotification of a portion of land in the Multi Product SEZ at Atchutapuram and Rambilli Mandals, Visakhapatnam District, Andhra Pradesh

After deliberation, the Board decided to approve the request of Andhra Pradesh Industrial Corporation Limited (APIIC) for de-notification of 905.21 hectares from the SEZ thereby making the total area of the SEZ as 1300.82 hectares. The approval is also subject to the contiguity of the SEZ being maintained the DC furnishing a certificate that the developer has either not availed or has refunded all the tax/duty benefits availed under SEZ Act/Rules in respect of the area to be de-notified.

(ii) Request of M/s MADC for decrease in area of the notified multi product SEZ at Mihan, Nagpur, Maharashtra

After deliberation, the Board decided to approve the request of M/s. Maharashtra Airport Development Corporation (MADC) for de-notification of 10.12 hectares in the nonprocessing area on which M/s. Dr. D.Y. Patil Educational Enterprises Private Limited has set up an International School, as a co-developer. With this approval the co-developer status granted to M/s. Dr. D.Y. Patil Educational Enterprises Private Limited, in the BoA meeting held on 8th December, 2008, also stands withdrawn. The approval is subject to the contiguity of the SEZ being maintained and the DC furnishing a certificate that the developer has either not availed or has refunded all the tax/duty benefits availed under SEZ Act/Rules in respect of the area to be de-notified.

(iii) Request of M/s. Metro Valley Business Park Private Limited for addition of land in the sector specific SEZ for Information Technology (IT) at Gurgaon, Faridabad Road, Gurgaon, Haryana

The Board after deliberations approved the request of M/s. Metro Valley Business Park Private Limited for addition of an area of 1.7275 Ha, thereby making the total area of the SEZ as 12.9441 Ha. The approval is, however, subject to the following conditions:-

a) Establishment of contiguity as proposed by developer

b) No duty concessions would be available for construction of such structures to achieve contiguity in the SEZ, to the developer.

c) The additional area would be notified only after the contiguity is established by the developer

(iv) Request of M/s. Cochin Port Trust for de-notification of a portion of land in the for setting up of sector specific SEZ for Port based at Vallarpadam, Cochin

After deliberation, the Board decided to approve the request of M/s. Cochin Port Trust for de-notification of 4.8035 hectares from the SEZ thereby making the total area of the SEZ as 110.4465 hectares. The approval is subject to the contiguity of the SEZ being maintained and the DC furnishing a certificate that the developer has either not availed or has refunded all the tax/duty benefits availed under SEZ Act/Rules in respect of the area to be denotified.

Item No. 54.5: Request for withdrawal of formal approval

(i) Withdrawal of formal approval granted to M/s. Pradip Overseas Limited, for setting up of sector specific SEZ for Textile at village Bhamasra, Taluka Bawla, District Ahmedabad, Gujarat

The Board decided to approve the request of M/s. Pradip Overseas Limited for withdrawal of formal approval granted to them for setting up of sector specific SEZ for Textile at village Bhamara, Taluka Bawla, District Ahmedabad, Gujrat, over an area of 109.48 hectares. The approval is subject to the contiguity of the SEZ being maintained and the DC furnishing a certificate that the developer has either not availed or has refunded all the tax/duty benefits availed under SEZ Act/Rules.

Item No. 54.6: Requests for de-notification

(i) Request of M/s. Bengal Shapoorji Infrastructure Development Limited for denotification of the sector specific SEZ for IT/ITES at Bidhannagar Township Durgapur, District Burdwan, West Bengal, notified over an area of 10.12 hectares

After deliberations, the Board decided to approve the request of M/s. Bengal Shapoorji Infrastructure Development Limited for de-notification of the sector specific SEZ for IT/ITES at Bidhannagar Township Durgapur, District Burdwan, West Bengal, notified over an area of 10.12 hectares. The approval is subject to the contiguity of the SEZ being maintained and the DC furnishing a certificate that the developer has either not availed or has refunded all the tax/duty benefits availed under SEZ Act/Rules in respect of the area to be denotified.

Item No. 54.7: Request of M/s. Akshaypatra Infrastructure Private Limited for change of location of the sector specific SEZ for Food Processing

DC KASEZ informed the Board that the recommendation of Government of Gujarat on the request of the developer has not yet been received. Further, Board also noted that developer presently has possession of only 30.0782 hectares of land in the new location. The Board, therefore, after deliberations, rejected the request of the developer for change of location. The Board also observed that the developer may apply for a fresh formal approval as and when it fulfills the prescribed conditions for setting up a SEZ.

Item No.54.8: Requests for extension of validity of formal approvals beyond 5th & 6th year

The Board advised the Development Commissioners to recommend the requests for extension of formal approval beyond 5th year and onwards only after satisfying that the developer has taken sufficient steps towards operationalisation of the project and further extension is based on justifiable reasons. Board also observed that extensions may not be granted as a matter of routine unless some progress has been made on ground by the developers. The Board, therefore, after deliberations, extended the validity of the formal approval to the requests for extensions beyond fifth years for a period of one year and those beyond sixth year for a period of 6 months from the date of expiry of last extension. Accordingly, the decisions of the requests are as under:-

(i) Request of M/s. G.P. Realtors Private Limited for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at villages Behrampur & Balola, District Gurgaon, Haryana, beyond 25th July 2012 (beyond 5th year)