Special Economic Zone Units Allowed to Relocate

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Jun. 17 – The government will soon allow industrial units to transfer from one special economic zone to another pending consent from the Board of Approval (BoA).

It is easier for an industrial unit to petition for a transfer to another special economic zone if the units have yet to begin operations or production as opposed to a unit that has already begun producing and exporting goods. Such a unit will have more tax provisions to account for and may be subject to more scrutiny from authorities.

Industrial units may opt to transfer SEZs to ease business consolidation and allow various corporate units to be present in one area. Moreover, moving to another SEZ that is nearer to its target market or nearer to a production source may be more beneficial to the business overall.

“While it is not a frequent request that we get, but for reasons of consolidation or geographical proximity, a unit may want to shift. We thought that there was no harm in allowing them to do that,” L. B. Singhal, director general, export promotion council for EoUs and SEZs and a member of the BoA told The Economic Times.

Currently, the government does not provide any specific rule for transferring units from one SEZ to another although this may soon change as authorities are expected to release transfer guidelines for units.