Ministry of Commerce & Industry instructs Zonal Development Commissioners on approval procedures for converting Non-Processing Built-up Areas (NPA) to Processing Areas (PA) in IT/ITES SEZs, subject to no pending duty refund claims.
The Ministry of Commerce & Industry’s Department of Commerce (SEZ Division), through Instruction No. 121, formalizes the procedure for converting Non-Processing Built-up Area (NPA) back into Processing Built-up Area (PA) within IT/ITES Special Economic Zones (SEZs). The instruction acknowledges that developers who previously demarcated a portion of their area as NPA under Rule 11B of the SEZ Rules, 2006, are now seeking this reverse conversion (NPA to PA). It clarifies that while Rule 11B governs the initial NPA demarcation, the conversion back to PA is managed under Rule 11. Specifically, the Development Commissioner is authorized by sub-Rules (1) and (2) of Rule 11 to issue the necessary demarcation orders pursuant to Section 6 of the SEZ Act, which includes implementing measures for securing entry and exit to the newly designated areas. A critical condition for approving these proposals is that the applicant Developer must not have any pending claim for a duty refund related to the area being converted.
K-43022/194/2025-SEZ
Government of India
Ministry of Commerce & Industry
Department of Commerce
SEZ Division
Vanijya Bhawan, New Delhi
Instruction No. 121 | Dated the 17th 0ctober, 2025
To
The Zonal Development Commissioner
All Zonal Special Economic Zones.
Subject: Conversion of demarcated Non-Processing Built up area (NPA) into Processing Built Up Area (PA)-reg.
Ma’am/Sir,
I am directed to refer to the subject mentioned above regarding granting approval with respect to proposals for conversion of demarcated Non-Processing Built up Area (NPA) into Processing Built Up Area (PA) and to say that the developers in IT/ITES SEZs which had earlier got a portion of built-up area demarcated into NPA u/R 11B of the SEZ Rules, 2006 have now applied to the Development Commissioner for reverse demarcation (NPA to PA).
2. In this regard, it is informed that Rule 11B contains the provisions for demarcation of a portion of built-up area as NPA from PA for IT/ITES SEZs. So far as demarcation from NPA to PA is concerned, the same is governed by Rule 11 wherein under sub-Rule (1) and (2) of Rule 11, the Development Commissioner has been given the authority to issue demarcation order under the provisions of Section 6 of the SEZ Act and take appropriate measures to secure entry and exit from/to demarcated areas. However, all such cases may be decided only if there is no claim of any duty refund by the applicant Developer.
3. This issues with the approval of Competent Authority.
Yours faithfully,
(Prateek Bajpai)
Under Secretary to the Govt. of India
Tel. 011-23039829
Email: prateekbajpai.moca@nic.in
