BoA rule likely for inter-SEZ transfer of units
The Board of Approval (BoA) for SEZs will consider framing rules that will allow migration of units from one SEZ to the other on 8 June 2010. As of now there is no specific provision for transfer of a unit from one SEZ to the other. The issue assumes significance as several units have approached the Union Ministry of Commerce seeking inter-SEZ transfers.
Government may tweak SEZ contiguity norms
The Union Government may relax the contiguity norms for SEZs, a move that is expected to be beneficial for zones such as Navi Mumbai SEZ in Maharashtra and IFFCO Kisan SEZ in Andhra Pradesh. The existing guidelines, which lay down contiguity within SEZs, would have forced developers to invest in building bridges and flyovers over railway lines or water bodies falling within such zones, even if they are located in the non-processing areas where there is no production activity.
As tax sops are not given for operations in nonprocessing areas, the Board of Approvals (BoA) for SEZs is of the view that the government could relax contiguity norms there. In areas where maintaining contiguity will be mandatory, the government may offer tax-breaks on inputs needed for constructing bridges or flyovers. The BoA for SEZs is of the view that relaxing contiguity norms for developers cannot be ad hoc and there has to be some established criteria in place.
No FDI lock-in for hotels & tourism projects
The Union Government has decided to eliminate hotel and tourism projects from the purview of the three-year lock-in clause which governs real estate activities, in order to speed up foreign investment in the country's hospitality sector.
According to sources, in order to benefit of the proposed relaxation, projects must earmark a minimum 50 per cent of built-up space for hotel and tourism activities, including beach resorts, restaurants and tourist complexes, and atleast 20 per cent for developing hotel rooms.
Currently, FDI norms forbid foreign investors from repatriating profits back home for three years if investments are made in real estate projects including hotels and tourism-related ventures.
Companies like Unitech and DLF, who have lined up massive projects in the hotels and tourism sector are keen to supplement liquidity with foreign funds.
Punjab approves new power generation policy
The Punjab Government on 17 June 2010 approved the 'Power Generation Policy-2010' to transform the state from power deficit to power surplus state besides ensuring quality supply of power to all consumers at affordable prices.
The new policy is likely to strive to bring down the cost of power, to encourage setting up of power stations by private developers besides to promote and support ancillary industry related to power plants.
Some of the features of the new policy are It will be applicable to new power projects to be located in the state and also to pit head, coastal thermal power plants with an installed capacity of 250 MW or more at single location.
Captive power and co-generation power plants will not be covered under the scope of this policy. Likewise, the policy will not be applicable to the power projects which were covered under NRSE policy being implemented by Punjab Energy Development Agency and power projects set up in SEZ in the state.
A developer intending to set up a power project under this policy shall submit a comprehensive proposal to Punjab State Power Corporation (PSPCL) for appraisal.
The state government, through Punjab State Transmission Corporation or PSPCL or other assignees, will facilitate the clearances and approvals for connecting the power plant to the designated grid sub-station of the State Transmission Utility. However, the responsibility for obtaining these clearances and approvals would lie with the developer.
The state government shall extend 100 per cent exemption from payment of fee and stamp duty for registration for the land to be acquired for the project and for other facilities incidental thereto. 100 per cent exemption from payment of Change of Land Use Charges, EDC & License/Permission fee for the land under the project including residential, institutional and commercial components within power plant complex and for other facilities incidental thereto.
Waiver of 50 per cent Electricity Duty for construction of power plants, 100 per cent exemption from entry tax in respect of all supplies (including capital goods, civil construction material and raw materials) made for setting up and trial operations of the projects.
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