Wednesday, May 4 2005 20:45 Hrs (IST) - World Time -

New Delhi: Government tonight (May 4, 2005) cleared the long-awaited Special Economic Zone (SEZ) legislation providing a fiscal package, including 15-year income tax holiday, to give a big push to exports, foreign direct investment and job creation.

The umbrella legislation approved by Union Cabinet provides single-window mechanism for SEZs and their units, Information and Broadcasting Minister S Jaipal Reddy told reporters in New Delhi.

SEZ units will be eligible for 100 per cent tax exemption for five years, 50 per cent next five years and 50 per cent of the ploughed back export profits for the next five years.

The developers of the zones will continue to get 100 per cent income tax exemption for 10 years in a block period of 15 years.

It may be noted that the Budget had introduced an amendment in the Income Tax Act bringing in a sunset clause as per which SEZ units were to get these benefits only till 2009. The provision will be superseded if this legislation is passed by Parliament.

It provides for establishment of designated courts and a single enforcement agency to ensure speedy trial and investigation of offences committed in SEZs.

It encourages State Governments to liberalise State laws and delegate their powers to the development commissioners of the SEZS to facilitate single window clearance.

India already has eight SEZs. These are the eight Export Processing Zones in Kandla, Surat, Cochin, Sant Cruz, Falta, Chennai, Vishakhapatnam and Noida, which have been converted into SEZs.