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5. Requirements for establishment of a Special Economic Zone —
(1) The Board may approve as such or modify and approve a proposal for establishment of a Special Economic Zone, in accordance with the provisions of sub-section (8) of section 3, subject to the requirements of minimum area of land and other terms and conditions indicated in subrule (2).
(2) The requirements of minimum area of land for a class or classes of Special Economic Zone in terms of sub-section (8) of section 3 shall be the following, namely:—
(a)A Special Economic Zone for multi product shall have a contiguous area of one thousand hectares or more but not exceeding
5000 hectares:
Provided that in case a Special Economic Zone is proposed to be set up in Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram,
Manipur, Tripura, Himachal Pradesh, Uttaranchal, Sikkim, Jammu and Kashmir, Goa or in a Union Territory, the area shall be two
hundred hectares or more :
Provided further that at least fifty per cent of the area shall be earmarked for developing the processing area
Provided also that the Central Government may consider on merit the clubbing of contiguous existing notified Special Economic Zones
notwithstanding that the total area of resultant Special Economic Zones exceeds 5000 hectares.
(b) A Special Economic Zone for a specific sector or [1][for one or more services] or in a port or airport, shall have a contiguous area of one hundred hectares or more:
Provided that in case a Special Economic Zone is proposed to be set up exclusively for electronics hardware and software, including information technology enabled services, the area shall be ten hectares or more with a minimum built up processing area of one lakh square metres:
Provided further that in case a Special Economic Zone is proposed to be set up exclusively for handicrafts, the area shall be ten hectares or more.
Provided also that in case a Special Economic Zone is proposed to be set up exclusively for bio-technology, non- conventional energy,
including solar energy equipments/cell, or gem and jewellary sectors, the area shall be ten hectares or more with a minimum built up
area as under:
(i) forty thousand square meters in case of a Special Economic Zone proposed to be set up exclusively for biotechnology and non-conventional energy sectors, including solar energy equipments/cells but excluding a Special Economic Zone set up for non-conventional energy production and manufacturing;
(ii) fifty thousand square meters in case of a Special Economic Zone proposed to be set up exclusively for the gems and
jewellery sector.
Provided also that in case a Special Economic Zone for a specific sector is proposed to be set up in Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttaranchal, Sikkim, Jammu and Kashmir, Goa or in a Union territory, the area shall be fifty hectares or more for the Special Economic Zones not covered under the first and second provisos:
Provided also that at least fifty per cent. of the area shall be earmarked for developing processing area.
(c) Special Economic Zone for Free Trade and Warehousing shall have an area of forty hectares or more with a built up area of
not less than one lakh square metres:
Provided that in a stand alone Free Trade and Warehousing Zone at least fifty per cent of the area shall be earmarked for
developing processing area:
Provided further that a Free Trade and Warehousing Zone may also be set up as part of a Special Economic Zone for multiproduct:]
Provided also that in a Special Economic Zone for a specific sector, Free Trade and Warehousing Zone may be permitted with no minimum area requirement but subject to the condition that the maximum area of such Free Trade and Warehousing Zone shall not exceed twenty per cent. of the processing area.
(d)If a Developer subsequent to approval or notification of a Special Economic Zone acquires more contiguous and vacant land which makes the total area available, including the area already notified as Special Economic Zone, more than the minimum area required for another class of SEZ, the Board may consider such cases on a case to case basis for allowing conversion to another class of Special Economic Zone by subsuming such already approved or notified Special Economic
Zone.
(3) The requirements of the minimum area of land for the Special Economic Zones—
(a) which had been, before the commencement of these rules,—
(i) recommended by the Board of Approval constituted by the notification of the Government of India, in the Ministry of Commerce and Industry (Department of Commerce) Number 14/1/2001-EPZ dated the 7th August, 2001, and
(ii) approved by the Central Government;
(b) which had acquired or taken possession of the land required for setting up of the Special Economic Zones before the
commencement of these rules; and
(c) which are situated in any of the States mentioned under column (2) of the Annexure II to these rules, shall, for each sector under column
(3) of the Annexure II, be such as mentioned in the corresponding entries under column (4) against each such sector situated in the
State mentioned under column (2) of the said Annexure II.
(4) The Developer or Co-developer shall have at least twenty-six per cent. of the equity in the entity proposing to create business, residential or recreational facilities in a Special Economic Zone in case such development is proposed to be carried out through a separate entity or a special purpose vehicle being a company formed and registered under the Companies Act, 1956 (1 of 1956).
(5) Before recommending any proposal for setting up of a Special Economic Zone, the State Government shall endeavour that the following are made available in the State to the proposed Special Economic Zone Units and Developer, namely:—
(a) exemption from the State and local taxes, levies and duties, including stamp duty, and taxes levied by local bodies on goods
required for authorized operations by a Unit or Developer, and the goods sold by a Unit in the Domestic Tariff Area except the
goods procured from domestic tariff area and sold as it is;
(b) exemption from electricity duty or taxes on sale, of self generated or purchased electric power for use in the processing area of
a Special Economic Zone;
(c) allow generation, transmission and distribution of power within a Special Economic Zone subject to the provisions of the
Electricity Act, 2003 (No. 36 of 2003);
(d) providing water, electricity and such other services, as may be required by the developer be provider or caused to be provided;
(e) delegation of power to the Development Commissioner under the Industrial Disputes Act, 1947 (No. 14 of 1947) and other
related Acts in relation to the Unit;
(f) delegation of power to the Development Commissioner under the Industrial Disputes Act, 1947 (No. 14 of 1947) in relation to
the workmen employed by the Developer;
(g) declaration of the Special Economic Zone as a Public Utility Service under the Industrial Disputes Act, 1947 (No. 14 of 1947);
(h) providing single point clearance system to the Developer and unit under the State Acts and rules.
(6) The State Government shall, while recommending a proposal for setting up of Special Economic Zone to the Board indicate whether the proposed area falls under reserved or ecologically fragile area as may be specified by the concerned authority.
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