India Entry & Business Startup Consultings

Relaxation in Compliances for Special Economic Zones (SEZs) in view of COVID-19 Lockdown

The COVID-19 pandemic has extensively disrupted the constitution and functioning of the entire World. India accounts for 14.4% of the overall number of COVID-19 cases, making it the second worst hit country in the world. This appalling figure has especially risen due to the ongoing macabre second wave of COVID-19 in the country. 
On account of the agonizing crisis born out of the second wave of the COVID-19, the Indian Special Economic Zones (SEZs) have lost more than 50 percent export orders. The pain was furthered by roadblocks in logistics and supply chain, inter-state restrictions, mass exodus of migrant workforce and cash flow issues. In view of the prevailing situation and partial lockdown imposed by the state governments, most government offices are either closed or are functioning with inadequate staff. All these have created severe bottlenecks and crippled the state of Indian manufacturing. However, the objective of SEZ has always been to ensure ameliorate the process by providing relaxations in compliances which have to be met by units / Developers / Co-developers of SEZs. 

In order to felicitate the SEZ, the Government has given relaxation for the following compliances - 

  • Quarterly Progress Report (QPR) attested by Independent Chartered Engineers / Developers / Co-developers. 
  • SOFTEX form to be filed by IT/ITES units.
  • Filing of Annual Performance (APR) by SEZ units. 
  • Extension of Letter of Approvals (LoA) which may expire in cases of – 
    • Developers / Co-developers who are in the process of developing and operationalizing the SEZ. 
    • Units that are likely to complete their 5 years block NFE assessment. 
    • Units that are yet to commence operations. 

Moreover, the Development Commissioners have been instructed to ensure that Developers /Co-Developers / Units shall not face any difficulties and no punitive action is taken in the following cases –

  • Where any compliance is not met during this period impacted by the above disruption. Further, as may be possible, all extensions of LoAs and other compliances may be facilitated through electronic mode in a time bound manner.
  • In the cases where it is not possible to grant extension through electronic mode or in cases where a physical meeting is required, Development Commissioners are instructed that the Developer / Co-developer / Units do not face any difficulties due to such expire of validity during this period of disruption and an interim extension of the expiry date may be granted without prejudice till 30.06.2021.
     

 

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