The government is considering scrapping the proposed Development of Enterprise and Service Hubs (DESH) bill and instead, focusing on amending the existing special economic zones (SEZ) Act. Officials have been discussing the possibility of overhauling the SEZ legislation to address the concerns and demands of SEZs. One major consideration is allowing units within these zones to sell their products in areas outside SEZs, known as the domestic tariff area (DTA), without paying customs duties. The ministries of finance and commerce & industry have been in discussions for over a year, tackling issues such as partial de-notification of zones, sales to DTA, concessional corporate tax, and removal of net foreign exchange earning requirement. The commerce department is working on a cabinet note outlining the proposed amendments to the SEZ Act, aiming to accommodate the concerns of SEZs and enable them to thrive in the domestic market. The decision on whether to proceed with the DESH bill or amend the SEZ Act is expected before the winter session of Parliament.
