Units can migrate from one SEZ to another: government

The government has allowed industrial units to shift from one special economic zone (SEZ) to another after approval of the apex authority, the board of approval (BoA), L B Singhal, director general, export promotion council for EoUs and SEZs and a member of the BoA, said on Tuesday.

The permission to relocate units will be given on a case-to-case basis by the BoA, Singhal said. The board, chaired by the commerce secretary, clears SEZ proposals and frames rules guiding these zones.

Permission to relocate could easily be granted to units that are yet to start their operations or units that have started sourcing inputs but not started production, the official said. BOA may take a cautious approach in cases where production and exports have started.

''Where production and sale of goods have started in a unit, one has to consider provisions for income tax exemptions for migration of goods,'' he said. The BoA, therefore, decided that permission would be given to units seeking transfer on a case to case basis.

Allowing SEZ units to shift base could help in business consolidation as companies with several units in different SEZs would have the option of bringing them under one roof.

It would also help if for reasons of geographical proximity to a source of input or to a market, a unit owner wants to move to another SEZ.

''While it is not a frequent request that we get, for reasons of consolidation or geographical proximity, a unit may want to shift. We thought that there was no harm in allowing them to do that,'' Singhal. The commerce department is also likely to come up with guidelines for transfers so that adequate monitoring takes place during the process.

The SEZ rules do not allow existing units in the country to relocate to SEZs for claiming tax benefits. However, the existing rules have no specific provision for shifting of units from one SEZ to another.