Supplementary Agenda for the 111th meeting of the BoA for SEZs to be held on 28.07.2022

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No. K-43022/40/2022-SEZ Government of India

Ministry of Commerce and Industry Department of Commerce (SEZ Section)

Udyog Bhawan, New Delhi Dated the 25" July, 2022

OFFICE MEMORANDUM

Subject: 111" Meeting of the Board of Approval (BoA) for Special Economic Zones (SEZs) scheduled to be held on 28" July, 2022 - Supplementary Agenda regarding.

In continuation of this department's O.M. of even number dated 18th July, 2022, the undersigned is directed to enclose herewith the Supplementary Agenda for the 111" meeting of the BoA for SEZs scheduled to be held on 28" July, 2022 for information and necessary action. The agenda has also been hosted on the website: www.sezindia.gov.in.

To

i= BN (Sumit Kumar Sachan) Under Secretary to the Government of India Tel: 2306 2496 Email: sumit.sachan@nic.in

1. Central Board of Excise and Customs, Member (Customs), Department of Revenue, North Block, New Delhi. (Fax: 23092628).

2. Central Board of Direct Taxes, Member (IT), Department of Revenue, North Block, 3. New Delhi. (Telefax: 23092107). Joint Secretary, Ministry of Finance, Department of Financial Services, Banking

3. Division, Jeevan Deep Building, New Delhi (Fax: 23344462/23366797). Additional Secretary, Department of Promotion of Industry and Internal Trade (DPIIT), Udyog Bhawan, New Delhi.

4. Joint Secretary, Ministry of Shipping, Transport Bhawan, New Delhi. 6. Joint Secretary (E), Ministry of Petroleum and Natural Gas, Shastri Bhawan, New Delhi ;

5. Joint Secretary, Ministry of Agriculture, Plant Protection, Krishi Bhawan, New Delhi. 8. Ministry of Science and Technology, Sc ‘G’ & Head (TDT), Technology Bhavan, Mehrauli Road, New Delhi. (Telefax: 26862512)

6. Joint Secretary, Department of Biotechnology, Ministry of Science and Technology, 7" Floor, Block 2, CGO Complex, Lodhi Road, New Delhi - 110 003.

7. Additional Secretary and Development Commissioner (Micro, Small and Medium Enterprises Scale Industry), Room No. 701, Nirman Bhavan, New Delhi (Fax: 23062315).

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11. Secretary, Department of Electronics & Information Technology, Electronics Niketan, 6, CGO Complex, New Delhi. (Fax: 24363101)

12. Joint Secretary (IS-I), Ministry of Home Affairs, North Block, New Delhi (Fax: 23092569).

Electronics & Information Technology, Electronics Niketan, 6, CGO Complex, New Delhi. (Fax: 24363101)

12. Joint Secretary (IS-I), Ministry of Home Affairs, North Block, New Delhi (Fax: 23092569).

13. Joint Secretary (C&W), Ministry of Defence, Fax: 23015444, South Block, New Delhi.

14. Joint Secretary, Ministry of Environment and Forests, Pariyavaran Bhavan, CGO Complex, New Delhi — 110003 (Fax: 24363577)

15. Joint Secretary & Legislative Counsel, Legislative Department, M/o Law & Justice, A-Wing, Shastri Bhavan, New Delhi. (Tel: 23387095).

16. Department of Legal Affairs (Shri Hemant Kumar, Assistant Legal Adviser), M/o Law & Justice, New Delhi.

17. Secretary, Department of Chemicals & Petrochemicals, Shastri Bhawan, New Delhi 18. Joint Secretary, Ministry of Overseas Indian Affairs, Akbar Bhawan, Chanakyapuri, New Delhi. (Fax: 24674140)

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19. Chief Planner, Department of Urban Affairs, Town Country Planning Organisation, Vikas Bhavan (E-Block), I.P. Estate, New Delhi. (Fax: 23073678/23379197)

20. Director General, Director General of Foreign Trade, Department of Commerce, Udyog Bhavan, New Delhi.

21. Director General, Export Promotion Council for EOUs/SEZs, 8G, 8" Floor, Hansalaya Building, 15, Barakhamba Road, New Delhi — 110 001 (Fax: 223329770)

22. Dr. Rupa Chanda, Professor, Indian Institute of Management, Bangalore, Bennerghata Road, Bangalore, Karnataka

23. Development Commissioner, Noida Special Economic Zone, Noida.

24. Development Commissioner, Kandla Special Economic Zone, Gandhidham.

ment, Bangalore, Bennerghata Road, Bangalore, Karnataka

23. Development Commissioner, Noida Special Economic Zone, Noida.

24. Development Commissioner, Kandla Special Economic Zone, Gandhidham.

25. Development Commissioner, Falta Special Economic Zone, Kolkata.

26. Development Commissioner, SEEPZ Special Economic Zone, Mumbai.

27. Development Commissioner, Madras Special Economic Zone, Chennai 28. Development Commissioner, Visakhapatnam Special Economic Zone, Visakhapatnam

28. Development Commissioner, Cochin Special Economic Zone, Cochin.

29. Development Commissioner, Indore Special Economic Zone, Indore.

30. Development Commissioner, Mundra Special Economic Zone, 4" Floor, C Wing, 32. Port Users Building, Mundra (Kutch) Gujarat. Development Commissioner, Dahej Special Economic Zone, Fadia Chambers, Ashram Road, Ahmedabad, Gujarat

31. Development Commissioner, Navi Mumbai Special Economic Zone, SEEPZ Service Center, Central Road, Andheri (East), Mumbai — 400 096

32. Development Commissioner, Sterling Special Economic Zone, Sandesara Estate, Atladra Padra Road, Vadodara - 390012

33. Development Commissioner, Andhra Pradesh Special Economic Zone, Udyog 36. Bhawan, 9" Floor, Siripuram, Visakhapatnam — 3 Development Commissioner, Reliance Jamnagar Special Economic Zone, Jamnagar, Gujarat

34. Development Commissioner, Surat Special Economic Zone, Surat, Gujarat

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38. Development Commissioner, Mihan Special Economic Zone, Nagpur, Maharashtra 39. Development Commissioner, Sricity Special Economic Zone, Andhra Pradesh.

onomic Zone, Surat, Gujarat

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38. Development Commissioner, Mihan Special Economic Zone, Nagpur, Maharashtra 39. Development Commissioner, Sricity Special Economic Zone, Andhra Pradesh.

39. Development Commissioner, Mangalore Special Economic Zone, Mangalore. 41. Government of Andhra Pradesh, Principal Secretary and CIP, Industries and Commerce Department, A.P. Secretariat, Hyderabad — 500022. (Fax: 040-23452895).

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42. Government of Telangana, Special Chief Secretary, Industries and Commerce Department, Telangana Secretariat Khairatabad, Hyderabad, Telangana.

43. Government of Karnataka, Principal Secretary, Commerce and Industry Department, 44. VikasSaudha, Bangalore — 560001. (Fax: 080-22259870) Government of Maharashtra, Principal Secretary (Industries), Energy and Labour Department, Mumbai — 400 032.

44. Government of Gujarat, Principal Secretary, Industries and Mines Department Sardar Patel Bhawan, Block No. 5, 3rd Floor, Gandhinagar — 382010 (Fax: 079-23250844).

45. Government of West Bengal, Principal Secretary, (Commerce and Industry), IP Branch (4" Floor), SEZ Section, 4, Abanindranath Tagore Sarani (Camac Street) Kolkata — 700 016

46. Government of Tamil Nadu, Principal Secretary (Industries), Fort St. George, Chennai — 600009 (Fax: 044-25370822).

47. Government of Kerala, Principal Secretary (Industries), Government Secretariat, Trivandrum — 695001 (Fax: 0471-2333017).

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ndustries), Fort St. George, Chennai — 600009 (Fax: 044-25370822).

48. Government of Kerala, Principal Secretary (Industries), Government Secretariat, Trivandrum — 695001 (Fax: 0471-2333017).

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• 49.Government of Haryana, Financial Commissioner and Principal Secretary), Department of Industries, Haryana Civil Secretariat, Chandigarh (Fax: 01722740526).

• 50. Government of Rajasthan, Principal Secretary (Industries), Secretariat Campus, Bhagwan Das Road, Jaipur — 302005 (0141-2227788).

51. Government of Uttar Pradesh, Principal Secretary, (Industries), Lal Bahadur Shastri Bhawan, Lucknow — 226001 (Fax: 0522-2238255).

52. Government of Punjab, Principal Secretary Department of Industry & Commerce Udyog Bhawan), Sector -17, Chandigarh- 160017.

53. Government of Puducherry, Secretary, Department of Industries, Chief Secretariat, Puducherry.

54. Government of Odisha, Principal Secretary (Industries), Odisha Secretariat, Bhubaneshwar — 751001 (Fax: 0671-536819/2406299).

55. Government of Madhya Pradesh, Chief Secretary, (Commerce and Industry), VallabhBhavan, Bhopal (Fax: 0755-2559974)

56. Government of Uttarakhand, Principal Secretary, (Industries), No. 4, Subhash Road, 57. Secretariat, Dehradun, Uttarakhand 58. Doranda,Government Ranchiof —Jharkhand 834002. (Secretary), Department of Industries Nepal House, Union Territory of Daman and Diu and Dadra Nagar Haveli, Secretary (Industries), Department of Industries, Secretariat, Moti Daman — 396220 (Fax: 0260-2230775).

epartment of Industries Nepal House, Union Territory of Daman and Diu and Dadra Nagar Haveli, Secretary (Industries), Department of Industries, Secretariat, Moti Daman — 396220 (Fax: 0260-2230775).

59. Government of Nagaland, Principal Secretary, Department of Industries and Commerce), Kohima, Nagaland.

60. GovernmentIndustries, LIC of Chattishgarh,Building Campus,Commissioner-cum-Secretary2™ Floor, Pandri, Raipur, ChhattisgarhIndustries, Directorate(Fax: 0771-of 2583651). .

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Copy to: PPS to CS/ PPS to AS (AY) / PPS to JS (VB) PPS to Dir (SNS).

Supplementary Agenda for the 111" meeting of the Board of Approval to be held on 28' July, 2022 through Video Conferencing

111.6 Procurement of sand and soil for infrastructural development in SEZ

111.6 (i) Permission for procurement of restricted items (sand and soil) by developer/co-developer/units for infrastructural development/construction activities inside the Special Economic Zones.

the As per Section 2(m) of the SEZ Act, 2005, supplying goods, or providing services, from Domestic Tariff Area to a Unit or Developer amounts to "export". The export policy of DGFT as regards sand and soil which is primarily required for construction activities and infrastructure development is 'restricted',

The fourth proviso of sub-rule (1) of Rule 27 of the SEZ Rules, 2006 stipulates thatfor supply of Restricted items by a Domestic Ti Developer ariff Area Unit to Special Economic Zone Economic or Unit, the Domestic Tariff Area Unit may supply such items to a Special Unit Zone Developer or Unitfor setting up infrastructure facility orfor setting up ofa and it may also supply raw material to Special Economic Zone Unit for undertaking a manufacturing operation except refrigeration, cutting, polishing and blending, subject to the prior approval ofBoard ofApproval.

supply raw material to Special Economic Zone Unit for undertaking a manufacturing operation except refrigeration, cutting, polishing and blending, subject to the prior approval ofBoard ofApproval.

This department has been receiving proposals for supply of raw material (primarily sand/soil) for infrastructure development/construction purpose in the zone and the same were being placed before the Board of Approval for necessary permission as per the rule position stipulated above. The Board has allowed such procurement from time to time subject to the condition that the allowed items are actually used by the unit and environmental obligations are complied with.

The meeting of the Board of Approval is held at a frequency of once in every two months. During the interactive sessions held on the operational issues faced by the SEZs during the past lockdown owing to the Covid-19 pandemic, the developer/co-developer/units in SEZs had put forth the request to allow them procurement of sand/soil for internal consumption without obtaining approval from BoA so that they can carry out the construction activities without delay. the Accordingly, inorder to facilitate the industry, a circular was issued to all DCs with approval of the Hon'ble CIM on 18.05.2020 delegating the powers to the Development Commissioner to allow procurement of sand and soil from DTA for construction activities subject to the following conditions : (i) Items allowed are actually used by the unit.

owers to the Development Commissioner to allow procurement of sand and soil from DTA for construction activities subject to the following conditions : (i) Items allowed are actually used by the unit. of(ii)lockdownFulfillmentsituation of safeguardsand restrictions and Standardprevalent Operating Proceduresat that time). imposed by MHA (in view are met. and (iii) Environmental obligations prescribed by the MoEF&CC/State Pollution Control Board (iv) Post ratification by BoA, whenever the next meeting is convened. In light of the said circular, the Development Commissioners are considering such requests raised by the units/developers from time to time and granting approval as per the

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delegation. The cases are then received for post-ratification by the Board of Approval as per condition no. (iv) laid down in the said circular. the Since, construction activity is in the routine nature of infrastructure development and wassame can be carried out under the close observation of the Development Commissioner, it to proposed that the same may permanently be delegated to the Unit Approval Committee usedsimplifyin the SEZ.the procedure and formalities subject to the condition that the items are actually

r, it to proposed that the same may permanently be delegated to the Unit Approval Committee usedsimplifyin the SEZ.the procedure and formalities subject to the condition that the items are actually

the Accordingly, it was proposed to insert a proviso after the 4th proviso to Rule 27(1) to effect that BoA shall approve proposals for procurement of restricted goods from DTA except in cases of restricted goods which are required by SEZ Developers/units for construction purposes viz. sand and soil. The proposed amendment shall provide certainty and adequate legal basis for such delegation. The following draft formulation was shared with the DGEP and the DGFT vide OM dated 03.02.2021 for their comments:

“Provided that supply of Restricted items by a Domestic TariffArea unit to Special Economic Zone Developer or Unitfor the purpose ofconstruction orfor setting up an infrastructure facility shall be subject to the prior approval of the Unit Approval Committee subject to the condition that the items are actually used for the stated purposes .”

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Subsequently, DGEP, vide their OM dated 31 .01.2022 conveyed that they concur with the proposal for insertion of a proviso in Rule 27(1) after proviso 4" with the following modification and subject to withdrawal of circular dated 18.05.2020:

01.2022 conveyed that they concur with the proposal for insertion of a proviso in Rule 27(1) after proviso 4" with the following modification and subject to withdrawal of circular dated 18.05.2020:

“Provided also that supply of sand and soil, which is restricted item, as per export policy, by a Domestic TariffArea to Special Economic Zone Developer or Unitfor the purpose of construction or setting up of an infrastructural facility shall be subject to prior approval of the Unit Approval Committee subject to the condition that the items are actually usedfor the statedpurpose.”

the DGFT vide their OM dated 14.03.2022 stated that as the item is restricted for exports in Export Policy, its supply to SEZ/units in SEZ, would require an Export Authorization from O/o DGFT. However, they have also observed that a relaxation has already been built under SEZ Rules, 2006 for items restricted for exports, subject to prior approval of BoA. It has been stated that in view of the existing SEZ Rules and later instructions issued by SEZ Division with the approval of the Competent Authority, DGFT has no further comments/observations to make on the proposed draft notification.

he existing SEZ Rules and later instructions issued by SEZ Division with the approval of the Competent Authority, DGFT has no further comments/observations to make on the proposed draft notification. The draft notification was shared with the Legislative Department and the LD inter alia requested this Ministry to reconsider the proposal to amend the said rule with the following observations: (i) The proposed amendment empowering the Unit Approval Committee to grant prior approval for the supply of sand and soil which is restricted item as per the export policy for the purpose of construction or setting up of an infrastructure facility is contrary to the provisions of Section 9(2)(d) which confers power upon the Board to grant approval of such proposals.

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(ii)The 4 " proviso of Rule 27(1), already empowers the Board to approve the supply of restricted items by the Domestic Tariff Area unit to Special Economic Zone developer/unit for setting up infrastructural facilities.

(iii) The Board under Section 9(4) of the Act has power to delegate such powers and functions as it may deem fit, to one or more Development Commissioners.

setting up infrastructural facilities.

(iii) The Board under Section 9(4) of the Act has power to delegate such powers and functions as it may deem fit, to one or more Development Commissioners.

Accordingly, formulation in light of the observations of the Legislative Department, a revised was shared with them which was as follows: “Provided also that Development Commissioner may allow supply ofsand and soil, which is restricted item, as per export policy, by Domestic Tariff Area to Special Economic Zone Developer or Unitfor the purpose of construction or setting up ofan infrastructural facility, on recommendation of Approval Committee subject to the condition that the items are actually usedfor the statedpurpose . ”

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In response, the Legislative Department is of the view that the proposal to confer power upon the Development Commissioner is contrary to Section 9(2) of the Act, the proposed notification could not be issued by the Central Government. However, if it is considered necessary the Board may delegate its power under Section 9(4) of the said Act to one or more Development Commissioners as it may deem fit.

in The proposals for ratification of approval granted by the Development Commissioner light of circular dated 18.05.2020 were last considered in the 106% meeting of the BoA held on 28.09.2021. No such proposal has since been placed before the BoA for consideration/ratification.

oner light of circular dated 18.05.2020 were last considered in the 106% meeting of the BoA held on 28.09.2021. No such proposal has since been placed before the BoA for consideration/ratification.

matterIn view of the above and in light of the opinion of the Legislative Department, the power is placed before the Board of Approval for deliberation and decision for delegation of on under Section 9(4) of the SEZ Act to the Development Commissioner(s). A decision course of action on pending ratification with respect to cases approved by the Development Commissioner may also be taken. 111.7 Transfer of Letter of Approval of the developer (one proposal) Private111.7(i) ProposalLtd. SEZ for in favour transfer of M/s of Letter of Salcomp Approval Manufacturingof the India Private developer, M/sLimited. Nokia India

for M/s Nokia India Private Limited was granted LoA for setting up a sector specific SEZ manufacture and assembly of electronics, telecommunications and IT Hardware (including mobile phones, parts, components and accessories for phones and networks) and development of software, R&D activities, training and other services in telecommunication over an area of 210 acre (83.375 Ha) at Sriperumbudur, Tamil Nadu. The said land was leased by SIPCOT to the developer for 99 years. The SEZ was notified on 17.08.2005 followed by subsequent partial denotifications and as on date stands notified over an area of 63.6132 Ha.

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sed by SIPCOT to the developer for 99 years. The SEZ was notified on 17.08.2005 followed by subsequent partial denotifications and as on date stands notified over an area of 63.6132 Ha.

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the DC, MEPZ has informed that the developer suspended its manufacturing operations in year 2015 and M/s Salcomp Manufacturing India Private Limited acquired Nokia’s

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manufacturing unit in the year 2020. Further, that the developer is not interested in discharging the functions of a developer of the SEZ since it is not commercially and administratively feasible for them to continue the same and therefore they desire to transfer its developer status. entire SIPCOT has given an in-principle consent to transfer the leasehold rights over the extent of 63.6132 Ha area of SEZ after deducting the extent of land de-notified over the period of time. Further, that the Hon’ble High Court of Delhi vide order dated 22.12.2021, has allowed the transfer of leasehold rights under Nokia lease in favour of Salcomp. Vide the said order the provisional attachment order issued against Nokia, under Section 281B of the Income Tax Act, 1961, by which the transfer of lease hold rights in respect of properties under Nokia lease were prevented has been lifted.

hment order issued against Nokia, under Section 281B of the Income Tax Act, 1961, by which the transfer of lease hold rights in respect of properties under Nokia lease were prevented has been lifted. In this connection, DC has referred to Section 10(1)(a) of the SEZ Act, 2005 which stipulates that if at any time the Board is of the opinion that a developer is unable to discharge the functions or perform the duties imposed on him by or under the provisions of this Act or rules made thereunder, the Board may, on application, or with the consent of the developer, or otherwise, for reasons to be recorded in writing, suspend the letter of approval, granted to the developer for a while or part of his area established as SEZ, for a period not exceeding one year and appoint an administrator to discharge the functions of the developer in accordance with the terms and conditions of the LoA and manage the SEZ accordingly. A legal undertaking has been submitted by Salcomp Manufacturing India Pvt. Ltd. to undertake rights and liabilities of the developer, compliance of all legal requirements, assessment of taxability of the gain/loss arising, if any, out of the transfer of developer’s LoA in favour of the obligor; payment of penalties; tax/duty along with interest and other obligations. As evident from the list of directors, two of the three are Chineese nationals. In connection to the above, it may be noted that vide Instruction no.

x/duty along with interest and other obligations. As evident from the list of directors, two of the three are Chineese nationals. In connection to the above, it may be noted that vide Instruction no. 89 dated 17.05.2018, re-organization including change of name, change of shareholding pattern, business transfer arrangements, court approved mergers and demergers, change of constitution may be undertaken with the prior approval of the Board of Approval in respect of developer/co-developer subject to the condition that the developer/co-developer shall not opt out orliabilities exit of outthe of devth e Specialloper/co-developer Economic Zonewill andremain continues unchanged to operateon such asreorganization. a going concern. All Subsequently, vide Instruction no. 109 dated 18.10.2021, the aforesaid powers were delegated to the Unit Approval Committee. As per the said instruction, the business transfer arrangements pertaining to developer/codeveloper shall be approved by the UAC subject to the safeguards specified therein. Hence, prima facie it appears that the case shall cover within the ambit of the said instruction.

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However, since the LoA is to be transferred to a completely new entity which will be a new developer it is to be deliberated whether cases involving 100% change in the constitution/shareholding pattern/directors shall be placed before the BoA.

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111.8 Request for co-developer status (one proposal)

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lving 100% change in the constitution/shareholding pattern/directors shall be placed before the BoA.

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111.8 Request for co-developer status (one proposal)

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111.8(i) Request of M/s. Bhandari & Sangath Builders LLP, Ahmedabad for approval as co-developer within the dual-use area of non-processing area in GIFT Multi Services SEZ at Ratanpur, District Gandhinagar, Guajrat developed by M/s. GIFT SEZ Limited.

	and Phiropur, DistrictGandhinagar, Gujarat
Operationstobeundertakenbythe<br>codeveloper	building on building footprint 16C, bloc<br>no. 16, in the dual usenon processing area<br>ofGIFT SEZ.
performed by the co-developer
agreement, ifsodate	draft Lease cum Development Agreement<br>as been provided. It has been mentioned<br>hat the agreement will be made on getting<br>he mandatory approval from the BoA and<br>DC.

DC, GIFT SEZ has informed that the draft lease agreement is for 99 years and provisional letter of allotment for development of residential sub project over land area admeasuring 3872 sq. mtrs. (0.3872 ha) with development rights of 2,50,000 sq. Feet for residential buildings. Further, the developer of the multi services SEZ has already obtained dualthe requisituse ar e a Noin the Objection Non-processing Certificate area from for the 63.84 Gove ac r nmentes (25.8353 ofGujaratha). on 07. 10.2021 for the Recommendation by DC, GIFT SEZ:-

the requisituse ar e a Noin the Objection Non-processing Certificate area from for the 63.84 Gove ac r nmentes (25.8353 ofGujaratha). on 07. 10.2021 for the Recommendation by DC, GIFT SEZ:-

In view of the increase in economic activity and other developments at GIFT SEZ, Gandhinagar, DC, GIFT SEZ has recommended the proposal in terms of Rule 11(10) of the SEZ Rules read with Rule I1(A)(1) of the SEZ Rules, 2006 without any fiscal benefits subject to consideration and approval by the Board of Approval.

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