Agenda for Approval Committee meeting for Pune-Cluster to be held on 10 August 2023. — 10-9quadron-business-park-sez

SEEPZ SPECIAL ECONOMIC ZONE ANDHERI (EAST), MUMBAI.

AGENDA FOR

MEETING OF THE APPROVAL COMMITTEE FOR SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR IT/ITES AT PUNE OF M/S. QUADRON BUSINESS PARK PVT. LTD.-SEZ

Via Video Conferencing

DATE : 10.08.2023

TIME : 12.30 P.M.

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MEETING OF THE APPROVAL COMMITTEE FOR SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR IT/ITES AT PUNE, UNDER THE CHAIRMANSHIP OF DEVELOPMENT COMMISSIONER, SEEPZ-SEZ ON 10.08.2023

INDEX

Agenda Item No.

Subject

Agenda Item No. 01: - Confirmation of the Minutes of the meeting held on 27.06.2023 Agenda Item No. 02: - Monitoring of Performance M/s. Cognizant Technology Solutions India Pvt Ltd

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1 Minutes of the 86th Meeting of the Approval Committee held under the Chairmanship of Development Commissioner SEEPZ-SEZ for Sector Specific Special Economic Zone for IT-ITES of M/s. Quadron Business Park Pvt. Ltd.- SEZ, Hinjewadi Phase-II, Pune, held on 27.06.2023 via video conference. 1 Name of the SEZ M/s. Quadron Business Park Pvt. Ltd.-SEZ, Pune 2 Sector IT-ITES 3 Meeting No. 86th 4 Date 27.06.2023 Members present S r Name and Designation (S/Shri.) Department 1 Smt. Mital Hiremath Joint Development Commissioner Pune Cluster SEZ, Pune 2 Smt. Pradnya R. Gholap, DCIT (TDS) Pune Nominee of Income Tax, Pune 3 Dr. Dileeraj Dabhole Dy. DGFT Nominee of DGFT, Pune 4 Smt. Sunita Jagtap, Superintendent Nominee of Customs, Pune Special Invitee S r Name and Designation Department 1 Shri B. Ajay Kumar Specified Officer M/s. Quadron Business Park Pvt. Ltd- SEZ Agenda Item No.01: Confirmation of Minutes of the 85 th meeting held on 30.05.2023 The Committee, after deliberation confirmed the minutes of the 85th meeting of the Approval Committee meeting held on 30.05.2023. Agenda Item No.02: Application for Approval of list of material submitted by M/s. Quadron Business Park Pvt. Ltd. (Developer) After deliberation, Committee approved the list of material in terms of Rule 12(2) of SEZ Rules, list of material submitted by the Developer, duly certified by Chartered Engineer i.e. M L Kendre & Associates (M-117207/1 dated 08.0701999) having total value of Rs. 72,75,386.20 required for their authorized operations as detailed below: Sr. No. List

of Materials required

for the

below mentioned Authorised Operations. Estimated Value for

Goods purchased from DTA (Amt. in Rs. ) Estimated Value

for Goods purchased from Import (Amt. in Rs. ) Estimated Total Value of Goods (Amt. in Rs.) File No.S-SEZ-MINS0QBPL/1/2022-JDCP I/2315/2023 70

2 1. Regular Maintenance – All

SEZ Buildings. Rs. 72,75,386.20 0.00 Rs. 72,75,386.20 Total Rs. 72,75,386.20 0.00 Rs. 72,75,386.20 Meeting ended with a vote of thanks to the Chair. (Shyam Jagannathan, IAS) Chairman-cum- Development Commissioner Email- dcseepz-mah@nic.in File No.S-SEZ-MINS0QBPL/1/2022-JDCP I/2315/2023 71

GOVT. OF INDIA, OFFICE OF THE ZONAL DEVELOPMENT COMMISSIONER, SEEPZ – SEZ (PUNE CLUSTER)

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AGENDA NOTE FOR CONSIDERATION OF THE UNIT APPROVAL COMMITTEE

a) Proposal: Monitoring of the performance of M/s. Cognizant Technology Solutions India Pvt Ltd, an IT/ITES Enabled Services located at Block No.2, Plot No. 28, Quadron Business Park, Rajiv Gandhi Infotech Park, Mann Village, Tal. Mulshi, Phase-II Hinjewadi, Pune 411 057, for 2ND Block Period and 3RD Block period: 5th years of 2nd Block period i.e. 2017-18 4 years of 3rd Block period i.e.2018-19 to 2021-22 out of 5 years b) Specific Issue on which decision of UAC is required: Monitoring of the performance of the unit in terms of Rule 54 of SEZ Rules, 2006 5th year of 2nd Block period i.e. 2017-18 4 years of 3rd Block period i.e.2018-19 to 2021-22 out of 5 years c) Relevant provisions: - As per Rule 54 of SEZ Rules, 2006 “Performance of the Unit shall be monitored by the Approval Committee as per the guidelines given in Annexure appended to these rules”. 2 nd Block period

The details of the export projections for 2nd block period, is as detailed below: (i) Actual Export/ Approved Projections (Rs In crores) 2013-14 Actual 2014-15 Actual 2015-16 Actual 2016-17 Actual 2017-18 Projected FOB Value of Exports 805.05 775.27 847.65 657.58 1125.35 FE Outgo 28.34 23.95 25.33 22.64 139.13 NFE 776.71 751.32 822.32 634.94 986.22 File No.S-SEZ-MONT/1/2023-JDCP I/2617/2023 20

(I) Performance as compared to projections: FY 2017-18

(Rs. In crores) Year Export F.E. OUTGO Projected Actual Raw Material (Goods/Services ) C.G. import Other outflow Project ed Actual Projected Actual Actual 2017- 18 1125.35 381.33 0.00 0.00 112.05 5.49 11.38 Total 1125.35 381.33 0.00 0.00 112.05 5.49 11.38 (II) Cumulative NFE achieved: FY 2017-18 (Rs. in crores)

3 rd Block period i.e. FY 2018-19 TO FY 2021-22

The details of the export projections for 3rd block period, is as detailed below: (ii) Approved Projections (Rs In crores) 2018-19 2019-20 2020-21 2021-22 2022-23 TOTAL FOB Value of Exports 413.10 436.71 448.51 460.32 472.12 2230.76 FE Outgo 49.31 49.67 50.85 51.03 49.21 250.07 NFE 363.79 387.04 397.66 409.29 422.91 1980.69 (III) Performance as compared to projections: FY 2018-19 TO FY 2021-22

(Rs. In crores) Year Export F.E. OUTGO Projected Actual Raw Material (Goods/Serv ices) C.G. import Other outflow Proj ecte d Actual Projected Actual Actual 2018- 19 413.10 431.16 0.0 0 0.00 112.05 5.24 19.79 2019- 20 436.71 426.68 0.00 5.29 10.08 2020- 21 448.51 500.14 0.00 1.11 13.75 Year Cumulative NFE Achieved Cumulative % NFE Achieved 2017-18 3347.87 96.57% I/2617/2023 21

2021- 22 460.32 588.21 0.00 0.05 17.85 Total 1758.64 1946.19 0.0 0

112.05 11.69 61.47 (II) Cumulative NFE achieved: FY 2018-19 TO FY 2021-22 (Rs. In crores)

(III) Employment Achievement (Direct)

The Unit has achieved employment of 3724 employees (Men-2396, Women-1328,) as on 31.03.2022. (d) Relevant provisions: Rule 54 of SEZ Rules, 2006 “Performance of the Unit shall be monitored by

the Approval Committee as per the guidelines given in Annexure appended

to these rules”
(e) Other Information:
LOA No. & Date SEEPZ/NEW-SEZ/DLF- PUNE/02/LOA-02/2007-08/1208 dated 21.02.2008. Location of Unit Block No.2, Plot NO. 28, Quadron Business Park, Rajiv Gandhi Infotech Park, Mann Village, Tal. Mulshi, Hinjewadi, Pune 411 057 Validity of LOA 31.05.2023 Item(s) of manufacture/ Services IT/ITES Enabled Services Date of commencement of production 06.09.2007 Execution of BLUT 01.06.2008 Outstanding Rent dues NA Labour Dues NA Validity of Lease Agreement

Pending CRA Objection, if any NA Year Cumulative NFE Achieved Cumulative % NFE Achieved 2018-19 405.63 94.08% 2019-20 816.56 95.19% 2020-21 1298.33 95.61% 2021-22 1864.83 95.82% I/2617/2023 22

Pending Show Cause Notice/ Eviction Order/Recovery Notice/ Recovery Order issued, if any NA a) Projected employment for the block period b) No. of employees as on 31.03.2022 3724 Area allotted (in sq.ft.) 366861 Sq. ft Area available for each employee per sq.ft. basis (area / no. of employees) 9.8498 Sq. ft Investment

till date Building NA Plant & Machinery 127.47 Quantity and value of goods exported under Rule 34 (unutilized goods) NA Value Addition during the monitoring period NA Whether all the APRs being considered now has been filed well within the time limit, or otherwise. If no, details of the Year along with no of days delayed to be given. Yes Vide PUC, the Specified Officer has submitted a report vide letter dated 23.08.2022, in the prescribed format along with point-wise reply to the discrepancies as follows: (a) Export
Details of year-wise export as per the prescribed format: From the year 2017-2018 to 2021-2022 (In crores) Year/ Period Figures reported in APR (FOB Value) Figures as per Softex / Customs Records Difference , if any Reason for Difference / Remarks 2017- 2018 381.33 383.47 2.15 Exchange variation and credit note adjustment 2018- 2019 431.16 437.78 6.62 Exchange variation and credit note adjustment 2019- 2020 426.68 435.31 8.63 Exchange variation and credit note adjustment I/2617/2023 23

2020- 2021 500.14 512.44 12.3 Exchange variation and credit note adjustment 2021- 2022 588.21 588.55 0.34 Exchange variation and credit note adjustment (b) Import (i) (Capital Goods including procurement done on IUT (from SEZ, EOU, STPI, EHTP) basis: From the year 2017-2018 to 2021-2022 (in crores) Year/ Period Figures as per Revised APR Figures as per SEZ Online / Customs Records Difference, if any Reason for Difference / Remarks 2017- 2018 5.49 5.49 Nil NA 2018- 2019 6.14 6.14 Nil NA 2019- 2020 6.79 6.79 Nil NA 2020- 2021 2.84 2.84 Nil NA 2021- 2022 0.05 0.05 Nil NA (ii) Raw Material: N/A (c) BLUT (Rs. In crores) 1 Value of BLUT Executed (Duty foregone) (including for CG / Raw Material / Services) Value of Additional BLUT executed TOTAL Duty value of BLUT Executed in Lakhs: 24.9110 opening balance (2017-18) 17.8016 (unit renewal 2018-19) 41.40 (BLUT for Services 2021-22) 84.1126 2 Total Duty Foregone on goods & services procured Category Wise: Year Wise F.Y. Goods Services Import Indigenous 2017-18 1.35 0.62 12.13 2018-19 1.63 0.54 19.13 2019-20 1.95 0.69 17.96 2020-21 0.62 0.63 10.39 2021-22 0.01 0.15 8.29 Total 5.57 2.62 67.93 3 Has the Unit procured goods and or services without having sufficient balance in their BLUT. No I/2617/2023 24

If yes, Month & Year when the BLUT was exhausted Details of the consignments and Total value of Goods procured without having sufficient or nil balance in BLUT (d) Employment made as on date (as on end of block period / year up to which monitoring is being done) As on 31st March, 2022: Man: 2396 Woman: 1328 Total: 3724 (e) Details of pending Foreign Remittance beyond Permissible period, if any (as on 31.03.2022) To cross-check the same and verify whether necessary permission from AD Bank / RBI has been obtained. As per unit there is no pending foreign

remittance

beyond permissible period (f) Whether all softex has been filed for the said period. If no, details thereof. SO to also check whether unit has obtained Softex condonation from DC office / RBI and if approved, whether they have filed such pending Softex. Yes (g) Whether all Softex has been certified, if so till which month has the same been certified. If not, provide details of the Softex and reasons for pendency. 17 cases are pending for approval. Out of which 07 Softex not showing up on present officers’ portal. In case of 09 Softex the deficiency was raised and is pending with unit. 01 Softex not submitted by unit. (h) Whether unit has filed any request for Cancellation of Softex No (i) Whether any Services provided in DTA / SEZ/EOU/STPI etc. against payment in INR in r/o IT/ITES Unit during the period. If yes, details thereof (year wise details to be provided) Yes, During the year 2017-2018 to 2021-22, Unit has provided their services in DTA against payment in INR. Below are the details of the same in crores: Year Amount 2017-18 184.60 2018-19 102.84 2019-20 18.10 2020-21 16.15 2021-22 25.45 Total 347.14 I/2617/2023 25

As the unit has received payment in INR instead of foreign exchange. It is not treated as service as per section 2(z)(iii) of SEZ Act 2005. In this regard SCN may be issued. (k) Has the unit cleared any Capital Goods procured duty free in DTA against payment of Duty, or otherwise? Full details to be provided along with value of assets and duty discharged

Following are the details of removal of capital goods: (Rs. In crores) FY A.V. Duty Payable 2017-18

2018-19

2019-20 0.14 0.03 2020-21 0.18 0.03 2021-22 0.26 0.05 Total 0.58 0.11

(l) Is the unit sharing any of their infrastructures with other units or are utilizing infrastructure of another unit in the same or other SEZ? If so, details thereof, including the details of the unit with whom the sharing is being made, and the payment terms If approval for sharing of common infrastructure has been obtained from UAC / DC office, the date of UAC / Approval letter to be indicated No (m) Whether all DSPF for services procured during the said monitoring period under consideration has been filed by the unit and whether the same has been processed for approval by the SO Office. No, all DSPF are not filed by the unit. (n) Whether unit has filed all DTA procurement w.r.t. the goods procured by them during the monitoring period for the relevant period. If no, details thereof Yes (o) Details of the request IDs pending for OOC in respect of DTA procurement on the date of submission of monitoring report No Request ID is pending for OOC. (p) Has the unit set up any cafeteria / canteen / food court in unit premises? If yes, whether permission from UAC / DC office has been issued, or Yes, The Unit is asked to submit the application for regularization of I/2617/2023 26

otherwise office has been issued, or otherwise Whether unit has availed any duty paid goods / services for setting up such facility? If yes, whether unit has discharged such duty / tax benefit availed? details to be given including amount of duty / tax recovered or yet to be recovered cafeteria. (q) Whether any violation of any of the provisions of law has been noticed / observed by the Specified Officer during the period under monitoring NA (f) ADC’s observations:  The unit has achieved export of Rs. 381.33 crores against the Projected export of Rs. 1125.32 crores i.e.33.89% in the FY 2017-18 of 2nd Block period. The unit has achieved NFE of Rs. 3347.8753 crores i.e., 96.57% on cumulative basis in the FY 2017-18 i.e., last year of 2nd block period.  The unit has achieved export of Rs 1946.19 Crores against the Projected Export of Rs. 1758.64 crores i.e., 110.65% in the period of FY 2018-19 to 2021-22 of 3rd Block period.
The unit has achieved NFE of Rs. 1864.83 Crores i.e., 95.82% on cumulative basis by the end of the F.Y 2021-22.  The Unit has achieved employment of 3724 employees (Men-2396, Women- 1328,) in 2nd Block period.  The Unit has not filed DSPF for the services procured during the monitoring period.  It is observed that the unit has provided services in DTA against the payments received in INR as detailed below: (Rs. In Crores) Year Amount 2017-18 184.60 2018-19 102.84 2019-20 18.10 2020-21 16.15 2021-22 25.45 Total 347.14 As per Section 2(z) of SEZ Act, 2005, the definition of Services is given as below : “Services means such tradable services which, - (i) Are covered under the General Agreement on Trade in Services annexed as IB to the Agreement establishing the World Trade I/2617/2023 27

Organisation concluded at Martrakesh on the 15th day of April 1994 ; (ii) May be prescribed by the Central Government for the purpose of this Act ; and (iii) Earn foreign exchange ;  As the unit has been granted LOA for providing IT/ITES Services from their SEZ Unit, and since the services provided by them to DTA against INR does not classify as a ‘Service’ as per definition as given in Section 2(z) of SEZ Act, 2005, the unit has violated the provisions of the SEZ Acts / Rules. As per Rule 54(2) of SEZ Rules, 2006 “(2) In Case the Approval Committee comes to the conclusion that a Unit has not achieved positive Net Foreign Exchange Earning, or stipulated Value Addition as specified in rule 53 or failed to abide by any of the term and conditions of the Letter of Approval or Bond-cum- Legal Undertaking, without prejudice to the action that may be taken under any other law for the time being in force, the said Unit shall be liable for penal action under the provisions of the Foreign Trade Development and Regulation) Act, 1992.”  The Unit has received payment in INR instead of Foreign Currency, hence contravened the provision of Section 2(z)(iii) of SEZ Act, 2005. If agreed by the Approval Committee, SCN may be issued. Approval Committee may monitor the performance of the Unit, in terms of Rule 54 of SEZ Rules, 2006 for the period of 2 Block periods (5th year of 2nd Block period) and four years of 3rd Block period i.e.  5th Year of 2nd Block Period i.e. FY 2017-18  4 years of 3rd block period FY 2018-19 to FY 21-22

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