Looking at easing some restrictions on SEZ units: Minister Piyush Goyal

Commerce and Industry Minister Piyush Goyal on Wednesday said the government is looking at easing certain restrictions for units in the special economic zones (SEZ) to promote the sector's growth. SEZs in India are treated as foreign territories for trade and customs duties, with restrictions on duty-free domestic sales.

"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 here at an industry chamber function.

Regarding the industry's demand to extend benefits of the Remission of Duties or Taxes on Export Products (RoDTEP) Scheme to SEZs, he said the ministry will go about it "cautiously".

"At some point in time we will consider it once we are very confident that it will not lead to WTO non-compliance," he added.

The government in 2021 announced the rates of tax refunds under export promotion scheme RoDTEP for over 8,500 products such as marine goods, yarn and dairy items. SEZs and EOUs (export-oriented units) were kept out of the scheme. Under RoDTEP, various central and state duties, taxes, and levies imposed on input products, among others, will be refunded to exporters.

He added that because of budgetary constraints, the ministry was not able to extend the scheme to iron and steel sector also. In these zones, the largest areas of exports are petroleum products and software.

Companies in SEZs are urging the government to permit them to sell their products in domestic tariff areas or domestic markets without paying the import duties that currently apply, similar to duty-free FTA imports.

SEZs have emerged as an important contributor to India's exports. Total exports from SEZs stood at USD 155.8 billion in 2022-23. These included USD 61.6 billion in merchandise and USD 94.2 billion in services exports.

The minister also informed that they are undertaking the second exercise to identify minor offences which can be decriminalised with a view to promote ease of doing business.

Earlier this year, the government has framed the Jan Vishwas (Amendment of Provisions) law which seeks to promote ease of business by decriminalising minor offences through amendments in 183 provisions of 42 Acts.

Seeking inputs from the private sector, he said, "we are working on the Jan Vishwas 2.0" and promotion of ease of doing business will be a continuous effort of the government.

If the industry can give its suggestions soon, the ministry can make efforts to bring the Jan Vishwas 2.0 in the winter session of parliament. On national single window system, he expressed disappointment that the industry is not using the system adequately.

About 1.4 lakh different approvals are there on the system and the industry should give its feedback on its further improvement, he said.

Speaking at the function, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that the industry should give their feedback on further improving the business environment of the country.

The department has started an exercise -- cost of regulation survey as there are "huge" variations that exist across states when it comes to cost of regulation and cost of different services like power, no objection certificate for fire, environmental clearances, and stamp duty.

The exercise is taking cue from a similar exercise by OECD (Organisation for Economic Co-operation and Development) countries.

"It is a first attempt of its kind in the country...It can help states to cut cost of regulation...The next step will be (to) develop a framework for regulatory impact assessment," Singh said.

On the World Bank's Doing Business report, the secretary informed that they are now on different kind of framework -- be-ready framework survey. "That survey is covering 60 countries at a time...It is going to come to India sometime in the second half of 2024," he added.

In August 2020, the World Bank announced that it was temporarily pausing the publication of its well-known 'Doing Business' report as it investigates a number of data irregularities that have been reported in the 2018 and 2020 reports.

On ease of doing business, the industry suggested that there is a need for reducing the demand of litigation, which can be done through a combination of reducing government litigation, continued decriminalization, reconsidering the ban on retrospectivity and introducing more and more settlement mechanisms.

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