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Government
of Karnataka's Policy on SEZ
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PROCEEDINGS
OF THE GOVERNMENT OF KARNATAKA
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Sub
: State Policy for Special Economic Zone
Read : 1. Notification No.79/2000-CUS & No.41/2000-CE
Dated 26.5.2000 issued by the Govt. of India in the
Department of Revenue Ministry of Finance.
2. GO No.CI 94 SDI 2001 dated 19.4.2001
3. Letter No.F2(2)/5/2001-EPZ dated 18.6.2001
4. Letter No.F-2(1)/4/01-EPZ dated 17.10.2001
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| Preamble: |
Top |
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Government of India, as a measure to boost exports from
the country formulated a new scheme viz. Special Economic
Zone and Notifications referred to at Sl. No.(1) above
were issued to provide for a duty-free enclave for functioning
of units within the Special Economic Zone. In order
to utilize the benefits available under the Government
of India guidelines for the special Economic Zone and
to achieve the twin objectives of attracting investments
and augmenting exportS from the State, the State Govt.,
vide order referred to at Sl. No.(2) above had approved
establishment of a Special Economic Zone at Hassan.
Government of India vide letter indicated at Sl. No.(3)
above, has communicated in principle the approval for
establishment of a Special Economic Zone at Hassan.
State Government has initiated action to prepare a detailed
techno-economic feasibility study for the Special Economic
Zone and also to identify suitable firms to take-up
the development of Special Economic Zone.
Government
of India vide letter referred to at Sl. No.(4) above,
had suggested that with a view to boost investors confidence
in the scheme and to highlight the State Govt.'s stand
on issues relating to state levies, generation and distribution
of power, environmental clearances, etc., it is desirable
to have a State Level Policy for Special Economic Zone.
The
matter has been examined in detail and it has been felt
that there should be a policy at the State Level governing
the establishment and functioning of Special Economic
Zone.
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Hence
the following orders:
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| GOVERNMENT
ORDER No.CI 282 SPI 2001, B'LORE, Dt: 25.02.2002 |
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In the circumstances explained in the Preamble portion
of the Order, Government is pleased to formulate a State
Policy for Special Economic Zone as indicated in the
Annexure to this Government Order. This policy shall
come into force with immediate effect and shall govern
the development, operation and management of Special
Economic Zone and the industrial units to be established
therein.
This
issues with the concurrence of Finance Department vide
UO Note No.FD 2486 Exp-1/2001 dated 10.1.2002, Urban
Development Deptt., vide UO note No.UDD 256 UMF 2001
Dated 21.12.2001, Energy Deptt., vide UO Note No. DE
211 EEB 2001 dated 31.12.2001 and DE 201 PTC 2001 dated
8.1.2002, Forest, Ecology & Environment Deptt.,
vide letter No.EPE 32 ENV 2001 dated 10.1.2002, Rural
Development & Panchayat Raj Deptt., vide UO Note
No. EDP 30 RPC 2002 dated 4.1.2002, Revenue Department
vide UO Note No.ED 562 MUNOMU 2001 dated 12.2.2002 and
Labour Deptt. vide UO Note No.LD 65 LEW 2001 dated 1.1.2002.
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By
order an in the name of the Governor of Karnataka
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Sd/-
(T. Premanarasimaiah)
Under Secretary to Govt. (Indl.Devp),
Commerce & Industries Deptt.
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| To: |
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1. The Accountant General in Karnataka, Bangalore
2. The Chief Secretary to Govt., Vidhana Soudha, Bangalore
3. All the Addl. Chief Secretary to Govt., Bangalore
4. The Additional Secretary to Govt. of India, Ministry
of Commerce, Udyog Bhavan, New Delhi
5. All the Principal Secretary to Govt., Bangalore
6. The Principal Secretary to Chief Minister, Vidhana
Soudha, Bangalore
7. PS to Minister for LMT, Vidhana Soudha, Bangalore
8. PS to Minister for SSI, Vidhana Soudha, Bangalore
9. Addl. Secretary to Govt. of India, Ministry of Commerce,
New Delhi
10. PS to Minister for Infrastructure Development, Vidhana
Soudha, Bangalore
11. The Commissioner for ID & DIC, Race Course Rd.,
Bangalore
12. The CEO & EM, KIADB, Nrupathunga Road, Bangalore
13. The Managing Director, TMCSOK, UNI Bldgs., Thimmaiah
Road, B'lore
14. The Resident Commissioner, Karnataka Bhavan, New
Delhi
15. The Managing Director, VITC, Kasturba Road, Bangalore
16. The Director, EDECK, Infrastructure Development
Corpn. (Karnataka) Ltd., Cunningham Road, Bangalore
17. Guard File
18. Spare Copies.
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ANNEXURE
TO G.O No. CI 282 SPI 2001 dated 25.02.2002
STATE
POLICY
FOR
SPECIAL ECONOMIC ZONE
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| Preamble: |
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Government of India has introduced the concept of Special
Economic Zone (SEZs) in the year 2000 through a revision
in the Export-Import Policy 1997-2002.
SEZs
are specifically delineated duty-free enclaves treated
as a foreign territory for the purpose of industrial,
service and trade operations, with exemption from customs
duties and a more liberal regime in respect of other
levies. To promote foreign investment and other transactions,
domestic regulations, restrictions and infrastructure
inadequacies are sought to be eliminated in the SEZs
for creating a hassle-free environment. The SEZ scheme
seeks to create a simple and transparent system and
procedures for enhancing productivity and the ease of
doing business.
SEZs
can be developed in the public, private or joint sectors
or by the State Governments. They are expected to promote
the establishment of large, self-contained areas supported
by world class infrastructure oriented towards export
production. Exploiting the full potential of the concept
of SEZs would bring large dividends in terms of economic
and industrial development and the generation of new
employment opportunities.
Government
of Karnataka has proposed to set up a SEZ at Hassan,
which is midway between Bangalore and Mangalore on NH-48.
The proposals approved in respect of the Hassan SEZ
are detailed in G.O.No.CI 94 SPI 2001 dated 19th April
2001 and 20th October, 2001. Government is also proposing
to establish an exclusive SEZ for electronic hardware
near the proposed International Airport at Devanahalli.
Government is also proposing to convert existing Export
Promotion Industrial Park at White Field, Bangalore
and the proposed Export Promotion Industrial Park at
Mangalore (which is under implementation) into SEZ.
Government may also consider establishing of SEZs in
other parts of the state.
In
view of the above, the matter of formulating a policy
regarding the development of SEZs has been under the
consideration of the State Govt. The following are policy
initiatives for the SEZs:-
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1.
Implementing Agency KIADB (Karnataka Industrial Area
Development Board) will be the State Agency for implementation
of SEZs either independently or in association with
the private sector partners.
2. Development Commissioner: All matters pertaining
to SEZs in the state will be looked after by an exclusive
Development Commissioner for each SEZs and will function
from the SEZ site.
3. Environment Clearance: MOC's consents and other clearances
required from the Karnataka State Pollution Control
Board for units and activities within the SEZs would
be granted by the empowered officer of the Board working
under the administrative supervision and control of
the designated Development Commissioner for the SEZs.
Environmental clearance for the projects, from State
& Central Governments will have to be obtained as
per relevant statutes as prescribed in GO No. FEE 14
FNV 2000 dated 13th December, 2001. In the event Government
of India delegates the powers to the designated Development
Commissioner or other authority within the SEZ, the
clearances may be sought accordingly.
4. Water Supply: The SEZ authority shall ensure the
provision of adequate water supply within the SEZ.
5. Power: The SEZ authority will ensure continuous and
good quality power supply to the SEZ . Public Sector
Enterprises or Joint Ventures promoted by them can establish
independent Power Plants (IPPs) which will be permitted
to establish dedicated provision of power to the SEZ,
including generation, transmission and distribution,
besides fixing tariffs for the Zone. The SEZ authority
will ensure standby arrangements. The IPPs will also
be permitted to establish grid connectivity so as to
draw power from the grid as standby arrangement, subject
to their entering into a separate agreement with KPTCL
on mutually acceptable terms. Industrial Units and other
establishments in those SEZs for which no IPP has been
established will be permitted to generate their own
power for captive use. Industrial units in the SEZ will
be free to source power from Central Power Generating
Stations, from and out of unallocated surplus, for which
purpose KPTCL will provide wheeling facility from the
grid subject to payment of the prescribed wheeling charges
as per the normal policy of KPTCL. As per Energy Deptt.
Notification, industries setting up Captive Power Generation
(CPG) sets have been exempted from payment of electricity
duty. This would apply to new industries in SEZs. IPPs
in the SEZ and CEG sets set up by individual industrial
units within the SEZs will be charged a concessional
ST of 4% on fuel used for CPC.
6. ST, Duties, local taxes & levies: Developers
of SEZs and industrial units and other establishments
within the SEZs will be exempted from all State and
local taxes and levies, including ST, purchase Tax,
Entry Tax, ToT, Cess, etc. in respect of all transactions
made between units/establishments within the SEZs and
in respect of the supply of goods and services from
the Domestic Tariff Area to units/establishments within
the SEZ. All the industrial unit and their expansion
located in the SEZs, irrespective of their location
within the State shall be fully exempted from payment
of Stamp Duty & Registration Fees. Further, industrial
unit within the SEZ will be eligible for all other incentives
and concessions as per general policies of the Government.
7. Labour Regulations: The powers of the Labour Commissioner,
Govt. of Karnataka, shall be delegated to the designated
Development Commissioner or other authority in respect
of the area within the SEZs. Modalities will be devised
for the grant of various permission required from the
Chief Inspector of Factories & Boilers within the
SEZs themselves through the stationing of exclusive
personnel for the purpose or through other means so
that clearances relating to various labour laws can
be provided at a single point in the SEZs. Except in
emergent circumstances the prior permission of the Development
Commissioner or other designated authority of the SEZs
would be required for the conduct of inspections by
these agencies of industrial units and other establishment
within the SEZs. All industrial units and other establishments
in the SEZs will be declared as 'Public Utility Service'
under the provisions of the Industrial Disputes Act.
In pursuance of the deregulation measures already put
in place and subject to Legislature approval and Government
of India's assent, amendments are proposed to the Industrial
Disputes Act. The proposed amendments would include,
inter alia, limiting the applicability of Chapter VB
to industries employing 300 or more workmen, etc. Similarly,
the Contract Labour (Regulations & Abolition) Act
is proposed to be amended to include certain peripheral
service activities.
8. SSI & IT Registration: The power to grant provisional
& permanent SSI registration and Letter of Intent
and registration of Information Technology Units, will
be delegated to the Development Commissioner or other
designated authority in respect of units in the SEZs.
9. SEZs as Industrial Townships: The State Govt. will
take appropriate steps to declare the SEZs an Industrial
Townships to enable the SEZs to function as self-governing,
autonomous municipal bodies.
10. Law & Order: The State Government shall make
appropriate and exclusive arrangements within the SEZs
for the maintenance of law and order.
11. Escort Services: Directorate of Industries &
Commerce, Karnataka State Industrial Investment &
Development Corporation, Karnataka Udyog Mitra, Resident
Commissioner, Karnataka Bhavan, New Delhi, shall provide
effective escort services to entrepreneurs/promoters
who are desirous of making investments in SEZ.
12. Committee for review & development of SEZ: The
State Government shall constitute a Committee of Secretaries
and other concerned officials, including representatives
of the SEZ authorities/promoters, under the Chairmanship
of the Chief Secretary to resolve various issues pertaining
to the promotion, development and functioning of SEZs
in the State.
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(T.
Premanarasimajah)
Under Secretary to Government (Indl. Devp),
Commerce & Industries Deptt.
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