Compliances Under Special Economic Zone Rules, 2006

1. Filing and Submission of Form F to the Development Commissioner [Rule 17(1)]:

• A consolidated application seeking permission for setting up of a Unit and other clearances, including the information listed in this rule, shall be made to the Development Commissioner, in Form F with a copy to the Developer.

2. Registration-cum-Membership Certificate (RCMC) for SEZ Units

• Registration-cum-Membership Certificate means the membership certificate issued by Export Promotion Council for Export Oriented Units and Special Economic Zones.
• The Unit or the developer including co-developer shall obtain a Registration-cum- Membership Certificate for availing exemptions, drawbacks and concessions for authorized operation of SEZs.

3. Record Maintenance by SEZ Units [Rule 22]

• Every Unit shall maintain proper accounts, financial year wise, [either in register form in hard copy or time stamped digital form,] which should clearly indicate in value terms the goods imported or procured from Domestic Tariff Area, consumption or utilization of goods, production of goods, including by-products, waste or scrap or remnants, disposal of goods manufactured or produced, by way of exports, sales or supplies in the domestic tariff area or transfer to Special Economic Zone or Export Oriented Unit or Electronic Hardware Technology Park or Software Technology Park Units or Biotechnology Park Unit, as the case may be, and balance in stock.
• Records to be maintained for a period of 7 years from the end of relevant financial year.
• The Unit shall submit Annual Performance Reports in the Form I, to the Development Commissioner office for the previous financial year before the end of the first quarter of the following financial year.

4. Filing of Documents for Admission and Removal of Goods [Rule 36]

• Any goods entering into or exiting from an SEZ must be accompanied by proper documentation. These documents are to be filed before the Authorized Officer of Customs stationed at the SEZ.

5. Duration of Goods [Rule 37]

• The goods admitted to a Special Economic Zone shall be utilized, exported or disposed off in accordance with the provisions of the SEZ Act and these rules, within the validity period of the Letter of Approval (LOA) issued to the Unit or in the case of a Developer within a period of one year or such extended period as may be allowed by the Specific Officer Units cannot hold or stock duty-free goods indefinitely.

6. Transfer of Ownership & Removal of Goods [Rule 38]

• The goods or services admitted into Special Economic Zone without payment of duty or manufactured or produced or partly processed or semi-finished goods may be transferred or given on loan to a Unit or Developer within the same Special Economic Zone or in another Special Economic Zone or to an Export Oriented Unit or to a unit in Electronic Hardware Technology Park or to a Unit in Software Technology Park, Biotechnology Park unit without payment of duty, subject to the following conditions, namely:-

(i) the transferee or loanee Unit or Developer is entitled for duty free procurement of the goods for its authorized operations;

(ii) the supplying and receiving Unit or Developer, as the case may be, shall maintain proper account of goods transferred or of goods given or taken on loan

(iii) the goods transferred or given on loan basis shall not be counted for the purpose of Net Foreign Exchange Earning by the Unit;

(iv) the transferred goods (other than the raw material procured from Domestic Tariff Area) shall be accounted, as import by the receiving unit while the value of the same shall be deducted from the import of the transferring unit;

(v) transfer or loan of goods to Units or developers in other Special Economic Zones or to Export Oriented Unit or Electronic Hardware Technology Park unit or Software Technology Park unit or Bio-technology Park unit shall be allowed with the prior written permission of the Specified Officer and subject to such conditions as may be imposed.

7. Destruction of Goods [Rule 39]

• • Destruction of goods Within SEZ

After advance intimation of not less than seven days to the Specified Officer, a Unit may destroy, without payment of duty, goods including capital goods, procured from Domestic Tariff Area or goods imported or goods manufactured or produced by the Unit including rejects or waste or scrap or remnants within the Special Economic Zone. Obtaining environmental clearance if any required for such destruction shall be the responsibility of the Unit.

• • Destruction of Goods Outside SEZ

Where it is not possible to destroy goods inside SEZ, destruction shall be carried out outside SEZ with the permission of the Specified Officer and in the presence of the Authorized Officer.

8. Movement of Goods To & From SEZ Processing Areas [Rule 40]

• The movement of goods to and from non-processing area to a processing area and from one processing area of Special Economic Zone to a different processing area of the same Special Economic Zone shall be under serially numbered challans pre-authenticated by the owner or Managing Director or working partner or the company secretary or by any person duly authorised in this behalf by the unit or developer, as the case may be, and the challans shall contain complete description of goods.