Ministry of Commerce and Industry has allowed dual use of non-processing area in the Special Economic Zones with effect from 2-1-2015. According to the newly inserted Rule 11A in the Special Economic Zones Rules, 2006, the non-processing area can be divided into two parts, wherein social or commercial infrastructure and facilities in one part can be used both by SEZ entities and entities present in the domestic tariff area, while facilities present in the other area are to be used only by SEZ entities.
In respect of facilities where dual use is permitted, the new provisions disallow exemptions, concessions, or drawback for creation of such infrastructure and states that Customs duty, Central Excise duty and Service tax and such other tax benefits already availed for creation of such infrastructure have to be refunded by the developer along with interest. The new provisions, inserted by Notification No. G.S.R. 5(E), dated 2-1-2015, further provide norms with respect to areas earmarked for residential, commercial and other social facilities for the purpose of dual use. It may be noted that now schools, colleges, socio-cultural centres, training institutes, banks, post office, etc. are also allowed in such SEZ non-processing areas.