The government is examining the possibility of lifting some restrictions for SEZ units to boost growth but benefits of input duty remission schemes for exports can be extended to the sector only after its WTO compatibility is ascertained, Commerce Minister Piyush Goyal has said.
“We are looking at ways and means to liberalise some of these restrictions on SEZ units. It’s under consideration...We are discussing it with all the stakeholders and hopefully that itself will give a significant boost to the SEZ units,” Goyal said at a conference on ‘Ease of Doing Business’ jointly organised by the Department for Promotion of Industry and Internal Trade and industry body CII on Wednesday.
Responding to the industry’s query on whether the government was considering extending benefits under the Remission of Duties or Taxes on Export Products (RoDTEP) Scheme and the Rebate of State and Central Taxes and Levies (RoSCTL) for garments and textiles to SEZs, Goyal said that the matter would need to be examined cautiously to ensure that WTO rules are adhered to.
“At some point in time, we will consider it once we are very confident that it will not lead to WTO non-compliance,” he said. The Minister added that both RoDTEP and RoSCTL, at the moment, were absolutely WTO compliant, which helped India resolve its outstanding disputes with the US at the multilateral forum.
In SEZs, the largest areas of exports are petroleum products and software, which anyway are not covered under RoDTEP, he said.
What it means to SEZs
The proposed liberalisation of restrictions for SEZs could include permission to units in the zone to sell their products in the domestic market outside (domestic tariff area) without paying import duties, although the Minister did not specify this. It is a long-pending demand from the industry which the Commerce Ministry has been pushing for with the Finance Ministry. The industry argues that it needs this flexibility to be at par with industry in India’s FTA partner countries that are allowed to export their items duty free to India. Goods exports from India’s SEZs in 2022-23 were valued at $ 61.6 billion
The Minister pointed out that the national initiative of ease of doing business was well supported by the industry and the government was now working to take it to the next level, see and monitor its impact on the ground and come up with a roadmap which is continuously evolving.
He said inputs from industry were required on a continuous basis. Businesses must make use of the National Single Window System and suggest gaps and measures to improve it, Goyal said.