Mumbai: India’s board of approvals for special economic zones (SEZ) has simplified some norms in regard to the tax-free enclaves.
At its 11 August meeting, the board approved of a new rule so that an SEZ developer can transfer an in-principle or formal approval to its subsidiary or special purpose vehicle (SPV) if it has a controlling or at least 51% stake in it.
It is a positive move by the government as it would help SEZ companies in the long run, said industry experts who declined to be named.
Currently, there are four categories where this rule applies—where there is just a mere name change and no change in shareholding pattern, where approval is transferred to 100% SPV or wholly owned subsidiary of developer company, demerger in terms of court decision as in the case of Bajaj Holdings and Investment Ltd and where partly the equity is held by the state government or one of its organizations by virtue of a requirement by a state government.
During the board meeting, commerce secretary Rahul Khullar said that during the first quarter of the fiscal year to March, total exports worth Rs39,411 crore has happened from SEZs.
However, there are concerns related to delays in providing requisite approvals. Khullar asked the development commissioner to hold unit approval committee meetings regularly.