New Guidelines for Power Operations in SEZs: Fiscal Benefits, Duty-Free Imports, and Licensing Requirements Explained

The notification outlines guidelines for power generation, transmission, and distribution within Special Economic Zones (SEZs). It specifies that power plants set up by developers in non-processing areas will receive fiscal benefits only for initial setup, with no obligation for positive Net Foreign Exchange Earning. Units within SEZs can generate power and enjoy duty-free imports, contributing to NFE obligations. Stand-alone power plants are treated as processing area units with similar benefits. Power distribution requires a license under the Electricity Act, 2003, except in specified situations. Separate entities for power functions are allowed, and tariffs are determined per the Electricity Act. The Department of Commerce, upon state recommendation, can issue distribution licenses.