Kandla Special Economic Zone:
INTRODUCTION
Kandla Special Economic Zone (KSEZ), Asia’s first export processing zone (EPZ) was set up in 1965. It is the largest of the seven zones in the country. Situated on the gulf of Kutch, on the west coast of Gujarat, 9 kms away from the port of Kandla, a fully developed all weather port. The zone is intended to to set up industrial units for export production / trade. Initially, the objectives of the zone were to earn foreign exchange and to generate more employment opportunities in the industrially backward district of Kutch. The other objective was to assist Kandla port by generating more cargo.

These objectives were significantly achieved. Kandla free Trade zone was converted into Special economic zone w. e.f. November 2000.

SEZ is a designated duty free enclave and deemed to be a foreign territory for trading operations, duties & tariffs. The scheme is intended to provide internationally competitive and hassle free environment for export production.

INFRASTRUCTURES & OTHER SUPPORT SERVICES TO INDUSTRIAL UNITS
The zone has a total area of 700 acres of land. About 620 acres have been developed in 2 phases ie Phase-I with 320 acres & Phase-II with 300 acres of land. The phase-I is fully saturated and phase-II has partially allotted land to the entrepreneurs. Approximately 120 acres of land is available for new industries. A few constructed sheds are also available. Both the plots and sheds are allotted at competitive rates as an export promotion measure, with an inbuilt subsidy linked to the establishment of commercial production at the rate of 75%, 50% & 25%, respectively in the first three years and 50%, 40% & 25% for built up sheds. The allotments are on a 15 years renewable lease basis.

Industrial area of zone is developed with internal roads, drainage, system and provided with water and power supplies. Support service agencies like BSNL, Gujarat Electricity Board, public sector banks, Post Office, Private Warehouse’s etc. have their offices in the zone to provide timely services to the Zone Units.

INCENTIVES- SALIENT FEATURES

The major incentives include :-

  • Custom duty exemption on imported capital goods, raw materials, consumables etc.
  • SEZ units need to be only a net foreign exchange earner. They are free to import all their requirements duty free from preferred sources.
  • Exemption from excise duty on goods procured from indigenous sources.
  • Corporate tax holiday upto 2010.
  • Exemption from payment of central sales tax on goods procured locally.
  • 100% foreign direct investments in manufacturing sector through automatic route.
  • Facility to sell product in the domestic market subject to payment of customs duties and import policy in force.
  • Customs / Excise duty exemptions on goods imported / procured domestically for setting up of units.
  • Facility to retain 100% foreign exchange receipts in the Export Earners Foreign currency (EEFC) account.
  • Export proceeds can be realized and repatriated within 12 months.
  • Full freedom for subcontracting in India or abroad.
  • No fixed waste norms.
  • Transactions from DTA to SEZ to be treated as exports.
  • Exemptions to SEZ units from external commercial borrowings restrictions, freedom to make overseas investment and carry out commodity hedging.
  • “Netting off’ export receivables against import payments.