R.1 Short title, extent and commencement

       (1) These rules may be called the Special Economic Zones Rules, 2003.
       (2) They shall come into force on the 1[11th day of May, 2004]
       1. Substituted for words 1st day of May, 2004 vide notification no. 58/2004 N.T. dated 30.04.2004 which was earlier substituted by notification 47/2004 N.T. dated 31.03.2004.

R.2 Definitions

       In these rules, unless the context otherwise requires, -
       (a) Act means the Customs Act, 1962 (52 of 1962);
       (b) authorised operation means setting up, or maintenance of the special economic zone unit, development, maintenance or operation of the special economic zone or providing any public utility service in the special economic zone by developer of such zone, or any activity of manufacture, production, processing, assembling, trading, repair, re-making, reconditioning, re-engineering, packaging of goods in such zone or any activity in connection therewith or carrying out any activity for rendering of any service, or export of such goods, or service from such zone;
       (c) developer means a person engaged in development or operation or maintenance of special economic zone or in providing public

R.3 Establishment and control

       (1) A special economic zone shall have clearly demarcated processing area and such area shall be distinctly separated from the non-processing area.
       (2) The processing area in the special economic zone shall be fully secured by a fencing with specified entry and exit points, subject to the satisfaction of the Commissioner of Customs.
       (3) The authorized persons shall only be allowed to enter the processing area of a special economic zone.

R.4 Transaction between special economic zone and domestic tariff area

       Subject to provision of sections 76 B and 76 F of the Act,-
       (a) any goods brought to domestic tariff area from a special economic zone by a special economic zone unit or developer shall be treated as imported goods; and
       (b) any goods admitted into special economic zone from domestic tariff area shall be treated as exported goods.

R.5 Admission of goods

       (1) Subject to the provision of clause (a) of section 76 F of the Act and the rules made in pursuance thereof, any goods required for carrying out any authorised operation shall be allowed to be admitted in the special economic zone without payment of duty;
       (2) Notwithstanding any thing in sub-rule (1), goods including motor vehicle for personal use of, or consumption by, officials, workers, staff or owners of the special economic zone unit or developer shall not be admitted into the special economic zone without payment of duty;
       (3) The Assistant Commissioner or Deputy Commissioner of Customs, as the case may be, may, for reasons to be recorded in writing like frequent entry and exit of goods from the zone, also permit goods, which are not required for carrying out authorised operations, to be admitted into the zone and exit out of th

R.6 Movement of goods out of special economic zone

All documentation for exit of the goods from the special economic zone may be filed by the domestic tariff area buyer or on behalf of domestic tariff area buyer by the special economic zone unit or developer, as the case may be, before the Assistant Commissioner of Customs or Deputy Commissioner of Customs of the zone, as the case may be.

R.7 Authorized operations

       (1) There shall be allowed-
       (a) to carry out in a special economic zone unit located in the processing area of a special economic zone; and
       (b) to a developer to carry out,
       only such authorised operations as are allowed under these rules for such purpose.
       (2) There shall not be allowed to operate from the same premises two or more special economic zone units.

R.8 Utilisation of goods

       (1) Goods admitted duty free into a special economic zone shall be used in a special economic zone unit or by the developer for carrying out authorised operations only.
       (2) In case of utilization of goods admitted duty free in the special economic zone, for purposes other than authorised operations, or in case of failure in respect of special economic zone unit or by the developer to duly account for the goods, such goods shall be chargeable to duty as if the goods have been removed for home consumption.

R.9 Abatement of duties of customs in special cases

       (1) In case of removal of capital goods, after using the same in the special economic zone, from a special economic zone to the domestic tariff area,-
       (a) the duty shall be levied on such goods on the depreciated value thereof 5[***], at the rate in force on the date of filing of the bill of entry;
       (b) the depreciation in value shall be allowed for the period from the date of commencement of commercial production of the special economic zone unit, or where such capital goods have been received in the special economic zone unit after such commencement of commercial production, from the date such goods have come into use for commercial production, to the date of presentation of bill of entry for home consumption;
       6[(c) the depreciation shall be allowed in straight line method as specified below

R.10 Temporary removal of goods to the domestic tariff area without payment of duty

       The following goods may be allowed to be removed temporarily from a special economic zone to the domestic tariff area without payment of duty subject to the regulation made in this behalf, namely:-
       (i) capital goods and parts thereof for repairs and return thereof,
       (ii) goods for display, export promotion, exhibition and return thereof,
       (iii) goods for jobwork, test, repair, refining and calibration and return thereof, and
       (iv) laptop or notebook computers or video projection systems for use by an authorized employee of a special economic zone unit or developer.

R.11 Removal of goods from a special economic zone unit to an export oriented undertaking or software technology park unit or electronic hardware technology park unit or to other special economic unit in the same or other special economic zone

       (1) With the prior permission of the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, goods may be allowed to be removed from a special economic zone unit to an export oriented undertaking or software technology park unit or electronic hardware technology park unit or to another special economic zone unit in the same special economic zone or in other special economic zone without payment of duty for the purpose of carrying out authorised operations within the receiving export oriented undertaking or software technology park unit or electronic hardware technology park unit or special economic zone unit, as the case may be:
       
       Provided that in case the goods admitted into special economic zone unit from any domestic tariff area, on which benefit under duty exemption pass book scheme or duty draw back

R.12 Destruction of goods imported or procured from domestic tariff area including capital goods or goods manufactured or produced by a special economic zone unit

       (1) After obtaining the permission of the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, a person entitled to discharge such function of a special economic zone unit, may destroy the goods ( including capital goods) procured from domestic tariff area by such unit or imported from outside India or goods manufactured or produced by such unit including rejects, waste, scrap or remnants, in the presence of proper officer without payment of duty within the special economic zone, and such destruction shall be carried out outside such zone only where it is not possible to destroy within such zone, subject to the condition that -
       (i) in case of destruction of goods procured from domestic tariff area, the special economic zone unit shall be required to pay back the export benefits taken by the domestic tariff area supplying unit or taken by the spec

R.13 Maintenance of accounts

       (1) There shall be maintained in every special economic zone unit accounts, financial year-wise, in the form convenient to them, at least under the following heads, namely:-
       (i) inflow of all foreign exchange by way of exports and other receipts;
       (ii) outflow of all foreign exchange on account of imports and on account of dividend, royalty, fees, foreign visits and other payments;
       (iii) value and quantity of all goods admitted free of duty or received under claim of duty drawback or duty entitlement passbook scheme credit;
       (v) value and quantity of goods produced, manufactured, processed, packaged, and cleared and services rendered, including waste, scrap and remnants arising out of such production, manufacture, processing or packaging, in the do

R.14 Submission of returns

       Every special economic zone unit shall endorse, a copy of the quarterly and annual return which it furnishes to the Development Commissioner, to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, in a format as specified for such purpose in Appendix 14IF of the Handbook of Procedures( Vol I), notified by the Director General of Foreign Trade, Government of India in the Ministry of Commerce and Industry under Public Notice No.1 ( RE-2003)/2002-07, dated the 31st march, 2003.]
       9. Substituted by Notification No. 61/2004-N.T. dt. 11.05.2004 for the following words:-
       14. Submission of Returns.- In respect of every special economic zone unit, there shall be furnished quarterly returns to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, the case may be, in a format as specified b

R.15 Recovery of duty on failure to achieve stipulated foreign exchange earning

       (1) In case of failure to achieve the net foreign exchange earning as stipulated in the 14[Foreign Trade Policy] for the time being in force, there shall be liable to, in respect of the special economic zone unit, pay duty alongwith interest at the rate as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue,) issued under section 28AB of the said Act in this regard and for the time being in force, from the date of duty free import or procurement from domestic tariff area of the said goods till the date of payment of such duty.
       (2). The duty payable, as referred to in sub-rule (1), shall be equal in amount to the duty leviable on such goods but for the exemption contained in section 76E of the Act and the duty so payable shall bear the same proportion as the unachieved portion of the stipulated net foreign exchange earning bears

R.16 Duration of stay

Goods admitted to a special economic zone shall be utilized in accordance with rule 7 or exported or disposed of in term of the provisions of these rules, within a period of five years from the date of admission of such goods, or such extended period as may be allowed by the Commissioner of Customs, for reasons to be recorded in writing, as the case may be, failing such disposal, it shall be liable in respect of special economic zone unit or on developer to pay duty along with interest at the rate as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue,) issued under section 28AB of the Act on the such duty, from the date of duty free import or procurement from domestic tariff area of the said goods till the date of payment of such duty as if such goods have been removed in domestic tariff area by special economic zone unit on the date of expiry of the said five year period.

R.17 Transfer of ownership

       (1) Goods admitted into or manufactured or produced in a special economic zone unit may be transferred without payment of duty to any other special economic zone unit in the same special economic zone for the purpose of carrying out authorised operations by the recipient special economic zone unit subject to the condition that both the supplying and receiving special economic zone units maintain proper account of such goods.
       (2) Capital goods admitted into, or goods manufactured or produced, in a special economic zone unit may be transferred without payment of duty to special economic zone units in other special economic zone for the purpose of carrying out authorised operations by the recipient special economic zone unit subject to the condition that both the supplying and receiving special economic zone units maintain proper account of such goods.

R.18 Security

       A person competent under the law for the time being in force to do so in respect of a special economic zone unit or a developer shall execute a bond along with surety or security to the satisfaction of the 4[Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be,] in the form annexed with these rules for the purpose of safeguarding the duty and such bond shall be in respect of the one or more of the following activities relating to the special economic zone, namely:-
       (i) movement of goods between port of import or export and the special economic zone;
       (ii) admission, manufacturing and other permitted activities in the special economic zone unit;
       (iii) temporary removal of admitted goods or goods produced or manufactured in the special economic zone unit for th

R.19 Monitoring

       The performance of a special economic zone unit and a developer of the concerned special economic zone shall be monitored by the Unit Approval Committee in which the Commissioner of Customs having jurisdiction over concerned special economic zone or his nominee shall be a member;]
       10. Substituted by c for the following:-
       19. Monitoring.- The performance of special economic zone unit and the developer shall be monitored by the Commissioner of Customs of the zone in the interest of safeguarding the duty.

R.20 Closure of special economic zone

       In the event of closure of a special economic zone,-
       (a) goods admitted into a special economic zone unit duty free within such special economic zone and lying unutilised as well as goods produced or manufactured in such special economic zone unit, shall be 11[either exported or shall be transferred to another special economic zone unit in other special economic zone or to export oriented undertaking or unit in electronic hardware technology park or software technology park with out payment of duty or] duty shall be paid as if the goods have been removed for home consumption under clause (b) of section 76 F of the Act, within a period of three months from such closure:
       Provided that in case of used capital goods, abatement of duties of customs shall be available in accordance with the provisions of sub-rule (1) of rule 9.
 &nbs

Form.1 Form-I

       General Bond (with Surety/ Security) to be executed by a Special Economic Zone Unit.
       
       WEhaving our registered office at hereinafter referred to as the Obligors andcalled the surety (ies)(which expression shall, unless repugnant to the context or meaning thereof, include our heirs, successors, executors, administrators, liquidators, legal representatives and assignees) hereby hold and firmly bind ourselves jointly and severally unto the President of India, hereinafter referred to as the Government in the sum of Rs__________Rupees______________only) for which payment to be well and truly made, we, the obligors, bind ourselves by these presents.
       WHEREAS we the obligors have been granted by the Government a letter of permission for setting up a unit in special economic zone for purposes of carryi

Form.2 Form-II

       General Bond (With Surety/Security) to be executed by Developer of the Special Economic Zone.
       
       WEhaving our registered office at hereinafter referred to as the Obligors andcalled the surety (ies) (which expression shall, unless repugnant to the context or meaning thereof, include our heirs, successors, executors, administrators, liquidators, legal representatives and assignees) hereby hold and firmly bind ourselves jointly and severally unto the President of India, hereinafter referred to as the Government in the sum of Rs__________Rupees______________only) for which payment to be well and truly made, we, the obligors, bind ourselves by these presents.
       WHEREAS we the obligors have been granted by the Government a letter of permission to develop, operate or maintain _______ special economic zo