Special Economic Zones Rules, 2006

Chapter 2
Procedure for establishment of Special Economic Zone

11. Processing and non-processing area. -

⁶[(1) The Development Commissioner shall demarcate the area and issue demarcation order under the provision of section 6, specifying the survey numbers and boundaries of area of the Special Economic Zone as specified in the notification issued under rule 8]

^Old[(1) The Development Commissioner of the  concerned Special Economic  Zone  shall be  the authority for demarcating the areas falling within the Special Economic Zone under the provisions of section 6.]

²[(2) The processing area and Free Trade and Warehousing Zone shall have specified entry and exit points and be fully secured by taking such measures as approved by the Board of Approval.]

^Old[(2)  The  processing  area  and  Free Trade and Warehousing Zone  shall be fully secured by boundary  wall or  wire mesh fencing having a  height of  at least two meters  and  forty centimeters  above  plinth  level with  top  sixty centimeters  being barbed wire fencing with mild steel angle with specified entry and exit points.]

⁷[Provided that in case of a Special Economic Zone for information technology or information technology enabled services or electronic hardware or biotechnology , the Development Commissioner shall approve such measures and inform the ¹⁰[Approval committee] old[Board] accordingly:

Provided further that in case the developer proposes to create two hundred and forty centimeter high wall with top sixty centimeter being barbed wire fencing and single entry and exit point, no separate approval shall be required under this sub-rule.]

(3) The Development Commissioner shall ensure compliance of the requirements of sub-rule (2).

³[The persons authorised by the Development Commissioner shall only be allowed to enter the processing area of a Special Economic Zone]

^Old[(4) The authorized persons shall only be allowed to enter the processing area of a Special Economic Zone.]

(5)  The  land  or  built  up  space  in  the  processing   area  or  Free  Trade  and Warehousing Zone shall be given on lease only to the entrepreneurs holding a valid Letter of Approval issued under rule 19 and ²[the lease period shall not less than five years but notwithstanding my other condition in the lease deed, the lease rights would cease to exist in case of the expiry or cancellation of the Letter of Approval.] ^Old[the lease period shall be co-terminus with the validity of the Letter of Approval]:

Provided  that  the  Developer  may,  with  the  prior  approval  of  the Approval  Committee,  grant  on  lease  land  or  built  up space, for  creating facilities such as canteen, public telephone booths, first aid centres, creche and such other facilities as may be required for the exclusive use of the Unit.

(6) The developer holding land on lease basis shall assign lease hold right to the entrepreneur holding valid Letter of Approval.

(7) Any transfer by way of sub-lease or any other mode by the Developer shall be valid only if the same is made to a person holding a valid letter of approval issued by the Development Commissioner.

(8) The Developer may allot land in the processing area on lease basis to a person desiring to create infrastructure facilities for use by the prospective Units.

(9) The Developer shall not sell the land in a Special Economic Zone.

¹¹[(9A) The Developer shall ensure sufficient and adequate space, as per the applicable Central Public Works Department norms, for the Office of Development Commissioner and Customs Officers posted in the Special Economic Zone]

¹[(10) No vacant land in the non-processing area shall be leased for business and social purposes such as educational institutions,
hospitals, hotels, recreation and entertainment facilities, residential and business complexes, to any person except a co-developer
approved by the Board:

Provided that the developer or co-developer may lease the completed infrastructure along with the vacant land appurtenant thereto for such purposes:

^9omit[2[Provided further that infrastructure for business or social purposes in the Special Economic Zone, as may be approved by the Board, shall be eligible for exemptions, concessions, drawback and any such infrastructure created in addition or in excess thereof shall not be eligible for any exemptions, concessions and drawback.]

^Old[Provided further that infrastructure for business or social purposes in the Special Economic Zone, as may be approved by the Board, shall be eligible for exemptions, concessions and drawback.]]

⁴[Provided also that the Developer or Co-Developer shall strive to provide adequate housing facilities not only for the management and office staff but also for the workers of the Special Economic Zones Units.]

^Old[(10) The Developer may allot the land in the non-processing area for business and social purposes such as educational institutions, hospitals, hotels, recreation and entertainment facilities, residential and business complexes:

^Old[Provided that infrastructure for business or social purposes in the Special Economic Zone,  as  may  be  approved  by  the  Board,  shall  be  eligible  for  exemptions, concessions and drawback.]

(11)  The  Special  Economic  Zone  shall  be  deemed to  be a  port,  airport,  inland container  depot,  land  customs  station  under  section  7  of  the Customs  Act in accordance with the provisions of section 53 from the date notified in this behalf:

Provided that Specified Officer may designate any area or area(s) in the Special Economic Zone as an area for loading and unloading of import or export cargo: Provided further that in case the said port, airport, inland container depot, land customs  station area is  to be used  for  loading and unloading of  import or export cargo  meant  for Domestic  Tariff  Area  importers  and exporters  also, storage for such cargo shall be in a separate enclosure and deliveries for such cargo shall be allowed  by the Authorized Officer of  the Special Economic  Zone  based  on  Bill of Entry,  assessed  by  the  Assistant  or  Deputy Commissioner  of Customs  having jurisdiction over the said Customs Station.

⁸[Provided also that addition or inclusion of any land to an existing Special Economic Zone , where such land contains a port, manufacturing unit, or structures in which no commercial, industrial or economic activity is in progress, then such Special Economic Zone shall not be eligible for any duty benefits in respect of the pre-existing structures but any additions or up-gradations to such existing ports, manufacturing units, or structures after their addition or inclusion in a Special Economic Zone shall be eligible for the fiscal incentives as applicable for a new infrastructure in a Special Economic Zone and also the authorised operations being carried on in such infrastructure shall be eligible for benefits as provided for under the Special Economic Zone Act and rules]

⁵[(12) The Central Government may lay down guidelines for development, operation and maintenance of Special Economic Zones.]

1. Substituted vide Notification Dated 10/8/2006

2. Substituted vide Notification Dated 16/3/2007

3. Substituted vide Notification Dated 3/2/2009

4. Inserted vide Notification Dated 3/2/2009

5. Inserted vide Notification Dated 3/8/2009

6. Substituted vide Notification Dated 14/06/2010

7. Inserted vide Notification Dated 14/06/2010

8 Inserted vide Notification Dated 12/8/2013

9.Omitted vide Notification Dated 02/01/2015

10. Subsituted vide Notification Dated 19/09/2018

11. Inserted vide Notification Dated 19/09/2018