Notification under Section 31 of IFSCA Act 2019 for modification in provisions of Special Eco Zones Act 2005 and Special Eco Zones Rules 2006
Introduction: The Ministry of Finance, under the powers vested by the IFSCA Act 2019, has issued a significant notification on February 28, 2024. This notification brings modifications to certain provisions of the Special Economic Zones Act 2005 and the Special Economic Zones Rules 2006. The amendments aim to regulate financial products, services, and institutions within the ambit of International Financial Services Centres (IFSC).
Detailed Analysis:
- Table 1 – Modifications in SEZ Act 2005:
1. Section 12 (Sub-section 6): The addition of a new sub-section (7) empowers the IFSCA to oversee recognition, registration, licenses, or authorizations for Units, with specific functions delegated to an appointed “Administrator (IFSCA).”
2. Section 13 (Sub-section 2 – Clause (f)): A proviso is introduced, designating the “Administrator (IFSCA)” as the Chairperson of the Approval Committee for Units requiring IFSCA recognition.
3. Section 15 (Sub-sections 1, 2, and 9): Provisions are added for units requiring IFSCA approval, including proposal submission to the “Administrator (IFSCA)” and coordination with the Approval Committee.
- Table 2 – Modifications in SEZ Rules 2006:
1. Rule 17 (Sub-rule 1): A proviso is added, specifying that Units requiring IFSCA recognition must submit applications to the “Administrator (IFSCA)” using Form FA, excluding Form F.
2. New Form ‘FA’: A detailed application form is introduced for various approvals, including setting up units, IEC number allotment, land/office space allotment, and other necessary registrations.
Conclusion: The notified modifications represent a strategic move by the Ministry of Finance to align SEZ regulations with the dynamic landscape of IFSCs. Empowering the IFSCA and introducing specialized forms for approval underscore the government’s commitment to streamline processes and enhance regulatory efficiency within the international financial services domain. Stakeholders must closely examine the implications to ensure compliance with the updated provisions. The proactive approach in integrating IFSCA oversight showcases a commitment to fostering a conducive environment for financial activities in International Financial Services Centres.
MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 28th February, 2024
S.O. 940(E).—In exercise of the powers conferred by sub-section (1) of section 31 of the International Financial Services Centres Authority Act, 2019 (50 of 2019), the Central Government hereby directs that certain provisions of the Special Economic Zones Act, 2005 (28 of 2005) and the Special Economic Zones Rules, 2006, as specified in column number (2) of Table 1 and Table 2, shall apply with such modifications, as specified in column number (3) of the said Tables, to the financial products, financial services or financial institutions, as the case may be, in an International Financial Services Centre, namely:
TABLE 1
THE SPECIAL ECONOMIC ZONES ACT, 2005
| Sl.No. | Section | Modifications |
| (1) | (2) | (3) |
| 1. | Sub-section (6) of section 12 | In section 12, after sub-section (6), the following sub-section shall be inserted namely:
‘(7) “Notwithstanding anything contained in this section, in case anyUnits requiring recognition, registration, license or authorisation by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019 (50 of 2019), the powers and functions of the Development Commissioner under this section, except the powers conferred under sub-section (3), shall be discharged by an officer nominated by the International Financial Services Centres Authority to be designated as “Administrator (IFSCA)”.’. |
| 2. | Clause (f) of sub-section (2) of section 13 | In section 13, in sub-section (2), after clause (f), the following proviso shall be inserted, namely: –
‘Provided that for a Unit requiring recognition, registration, license or authorisation by the International Financial Services Centres Authority, the Chairperson of the Approval Committee under clause (a) of subsection (2) of section 13 shall be the “Administrator (IFSCA)”.’. |
| 3 | Sub-sections (1), (2) and (9) of section 15 | In section 15
(a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely: ‘Provided further that any person intending to set up a Unit, requiring recognition, registration, license or authorisation by the International Financial Services Centres Authority, shall submit a proposal to the “Administrator (IFSCA)”.’. (b) in sub-section (2), the following proviso shall be inserted, namely:-“Provided that any such proposal received under second proviso to sub-section (1), shall also be sent to the Approval Committee for its approval.”; (c) in sub-section (9), the following provisos shall be inserted, namely: – “Provided that the Administrator (IFSCA) may, after approval of the proposal referred to in sub-section (3), grant the letter of approval to the person concerned to set up any Unit and undertake such operations, requiring recognition, registration, license or authorisation by the International Financial Services Centres Authority: Provided further that relevant information regarding such Units shall be shared by the Administrator (IFSCA) with the Development Commissioner of the SEZ on a monthly basis or as may be required from time to time”. |
TABLE 2
THE SPECIAL ECONOMIC ZONES RULES,2006
| Sl. No | Rules | Modifications |
| (1) | (2) | (3) |
| 1. | Sub-rule (1) of rule 17 | In rule 17, after sub-rule (1), the following proviso shall be inserted, namely: –
“Provided that, an application seeking permission for setting up a Unit requiring recognition, registration, license or authorisation by the International Financial Services Centres Authority shall be made to the Administrator (IFSCA) in Form FA, and Form F shall not be applicable to such Unit.”. |
| 2. | New Form ‘FA’ | After Form F, the following Form shall be inserted, namely: – |
“FORM FA
CONSOLIDATED APPLICATION FORM for
(See proviso to sub-rule (1) of rule 17)
1. Setting up of units in Special Economic Zone;
2. Allotment of Importer Exporter Code Number;
3. Allotment of land/industrial sheds/Office Space in the Special Economic Zone;
4. Registration-cum-Membership Certificate;
5. GST/Sales Tax registration;
6. Any other approval as may be required from the State Government.
The application should be submitted along with relevant payment details for a sum of rupees five thousand made to the Pay and Accounts Officer of the Kandla Special Economic Zone as per the details mentioned below, together with a project report giving details of activities proposed.
I.
| Name and full address of applicant firm/ company (in block letters) | |
| Registered Office (in case of limited Company and Head Office for others) | |
| Pin Code | |
| Tel.No. | |
| Permanent E-Mail Address | |
| Web-Site, if any | |
| Passport No., if any | |
| Name of Bank with Address and Account No. | |
| Digital Signature | |
| Income Tax PAN (attach copy) |
II.
| Constitution of the applicant firm: [Tick (√ ) the appropriate entry] | Public Limited Company
Private Limited Company Limited Liability Partnership Partnership Branch Proprietor ship Trust Others (please specify) |
(Attach Copy Of Certificate Of Incorporation along with Articles Of Association And Memorandum of Association In Case Of Companies And Partnership Deed In Case Of Partnership Firms, LLP Deed In Case of Limited Liability Partnership and other equivalent incorporation documents)
III. Area of Business proposed to be undertaken as per IFSCA Regulations: _______
(Eg. Banking, Fund Management, Insurance etc.)
IV. Name and complete address of each__________ of the Directors/Partners/Proprietor, as the case may be with Telephone numbers
V. INVESTMENT: (RS. IN LAKHS)
(a) Office Equipment such as computers, servers, office furniture.
(i) Indigenous _______
(ii) Import CIF value _______
(iii) Total (i) + (ii) _______
(b) Details of source(s) of finance
VI. INFRASTRUCTURE REQUIREMENTS
Requirement of land/Office Space: – ________ (Area in sq. mtrs.)
VII. EMPLOYMENT
Men ______
Woman _______
Transgenders _______
VIII. Shareholding of IFSC Unit
| (a) Equity Capital incl. Foreign Investment : | ($ in thousand) | (Rs. in lakhs) |
| (i) Authorized | ||
| (ii) Subscribed | ||
| (iii) Paid Up Capital |
Note: If it is an existing company, give the break up of existing and proposed capital structure
| (a) Shareholding Pattern : | ($ in thousand) | (Rs. in lakhs)
|
| (i) Foreign Holding | ||
| (ii) Indian Holding | ||
| (iii) IFSC Holding | ||
| Total Equity |
IX. OTHER INFORMATION
Whether the applicant has been issued any Industrial license or LOI/LOA under EOU/SEZ/STP/EHTP scheme. If so,give full particulars, namely reference number, date of issue, items of manufacture/ services offered and progress of implementation of each project.
Whether the applicant or any of the partner/Director who are also partners/Directors of another company or firms its associate concerns are being proceeded against or have been debarred from getting any License/Letter of Intent/ Letter of Permission under Foreign Trade (Development and Regulation) Act, 1992 or Foreign Exchange Management Act, 1999 or Customs Act, 1962 or Central Excise Act,1944.
| Place : ____________ | Signature of the Applicant : ____________ |
| Date: ____________ | Name in Block Letters : ____________ |
| Designation : ____________ | |
| Official Seal/Stamp | Tel. No. : ____________ |
| e-mail : ____________ | |
| Web-Site, if any ____________ | |
| Full Residential Address ____________ |
UNDERTAKING
I/We hereby declare that the above statements are true and correct to the best of my/our knowledge and belief. I/We shall abide by any other condition, which may be stipulated by the Development Commissioner.
I/We fully understand that any Permission Letter/Approval granted to me/us on the basis of the statement furnished is liable to cancellation or any other action that may be taken having regard to the circumstances of the case if it is found that any of the statements or facts therein furnished are incorrect or false.
An affidavit duly sworn in support of the above information is enclosed.
| Place : ____________ | Signature of the Applicant : ____________ |
| Date: ____________ | Name in Block Letters : ____________ |
| Designation : ____________ | |
| Official Seal/Stamp | Tel. No. : ____________ |
| e-mail : ____________ | |
| Web-Site, if any ____________ | |
| Full Residential Address ____________ |
[F. No. 3/4/2022-EM]
SURBHI JAIN, Jt. Secy.
