Agenda for Approval Committee meeting for SEZ Pune Cluster to be held on 09 February 2024 — 07-7syntel-international-pvt-ltd-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. SYNTEL INTERNATIONAL PVT. LTD. SEZ PUNE.

DATE : 09.02.2024

TIME : 04:00 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 09.02.2024

INDEX

Agenda Item No.

Subject

Agenda Item No. 01 :- Confirmation of the Minutes of the meeting held on 05.12.2023 Agenda Item No. 02 :- Monitoring of Performance for M/s. Syntel Pvt Ltd-LOA-26 (F.Y 18-19 TO 2022-23).

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FIIE NO.J.JE,Z.MINDUDII'L/1' 2U ZJNUVT Members present Special lnvitee Sr pepartmen Name and Designation t 1 Shri Shambhu Dayal Meena, Specified Officer F EEPZ-SEZ Pune Cluster Agenda Item No.01: Confrmation of Minutes of the 466 meeting held on 19.to.2023. The Committee, after deliberation confirmed the minutes of the 46th meeting of the Approval Committee held on 79.1O.2O23. Agenda Item No.O2: Monitoring of Performance in r/o M/s State Street SYntel Services kt Ltd. The performance of the unit for Sth year of 2nd block period i.e. FY 2017-18 and first 4 years of 3rd Block period (i.e., FY 2Ol8-19 t.o 2O2l-221was placed before the Committee for Monitoring purpose. i. The Committee observed that the Unit has achieved export revenue of Rs 95.71 crores as against projected export of Rs 32.39 crores i.e. 295.49"/o and has achieved positive NFE of Rs. 517. 13 Crores i.e. 97 .640/o in the 5th year of FY 2017-18 on cumulative basis at the end of2'd Block period. Minutes of the 47th Meeting of the Approval Committee held under the Chairmanship of Shri R. K.Mishra, Zonal Development Commissioner SEEPZ-SEZ for Sector Specific Special Economic Zone for IT-ITES of M/s. S5mtel International R/t. Ltd., Pune held on 05.12.2023 via video conference. I Name of the SEZ r /s. Syntel lnternational Rrt. Ltd., Pune. 2 [r-rres 3 Meeting No. br'n 4 Date F..s.azozs Sr Name and Designation (s/shri.) 1 Smt. Mital Hiremath Joint Development Commissioner r ne Cluster SEZ, Pune 2 Shri. Sandeep Sathe, DCIT-Circle 4, Pune Fominee of Income Tax. Punc I 3 Dr. Dileeraj Dabhole, Deputy DGFT t ominee of DGFT, Pune 4 Smt. Malathi J. Nair Superintendent I ominee of Customs, Pune Sector fenartrnent

r e No.D-iEZ-MtNJUJ|TL|t / 2U ZJ-JLJVr ii, The Committee observed that the Unit has achieved export revenue of Rs 227.74 crores as against projected export of Rs 191.33 crores i.e. l79.O2o/o and has achieved positive NFE of Rs. 213.17 Crores i.e.,93.600/o in the 4th year of 3'd Block period i.e. during FY 2018- 19 to 2O2l-22 on cumulative basis. iii.The Unit has also achieved employment of 487 employees (Men-321, Women- 166) in 4fr year of the 3'd block period as on 37.03.2022 upto which the monitoring has been done. After deliberation, the Approval committee noted the performance of M/s Street Syntel Services Prrt Ltd for the FY 2017-78 of the 5th year of 2nd block period and first 4 years of 3'd Block period, i.e., FY 2018-19 b 2021-22 in terms of Rule 54 ofSEZ Rules,2006. Meeting ended with a vote of thanks to the Chair. ffi", (Rajesh Kumar Mishra, IRS) Chairman-cum- Development Qg"ntniSgi61g1

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

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AGENDA NOTE FOR CONSIDERATION OF THE APPROVAL COMMITTEE

a. Proposal: Monitoring of the performance of M/s SYNTEL PVT LTD, a Computer Software and IT Enabled Services, for 5 years of 3RD block period i.e., FY 2018-19 to 2022-23. b. Specific Issue on which decision of Approval Committee is required: Monitoring of the performance of the unit FY 2018-19 to 2022-23 of 3RD block period of 5 years, in terms of Rule 54 of SEZ Rules, 2006. 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”. I. Performance as compared to projections: FY 2018-19 to FY 2022-23 i. Approved Projections (Rs In Crores)

2018-19 2019-20 2020-21 2021-22 2022-23 TOTAL FOB Value of Exports 26.50 45.47 70.64 89.99 109.35 341.95 FE Outgo 08.51 7.95 7.52 8.11 8.11 39.91 NFE 18.00 37.52 63.12 81.88 101.52 302.04

II.Performance as compared to projections: FY 2018-19 to 2022-23 (Rs In Crores)

Year Export F.E. OUTGO

Projected

Actual Raw Material (Goods/Services) C.G. import Other outflow Projected Actual Projected Actual Actual 2018-19 26.50 280.80 0.00 0.00 36.82 5.40 43.59 2019-20 45.47 80.28 0.00 1.19 1.08 2020-21 70.64 110.59 0.00 1.26 3.14 2021-22 89.99 129.77 0.00 0.08 0.36 2022-23 109.35 87.78 0.00 3.64 0.01 Total 341.95 689.22 0.00 0.00 36.82 11.57 48.18 III.Cumulative NFE achieved: FY 2018-19 to 2022-23 (Rs. In Crores) Year Cumulative NFE Achieved Cumulative % NFE Achieved 2018-19 235.55 83.89% 2019-20 313.49 86.82% File No.S-SEZ-MONT0SIPL/1/2024-JDCP

2020-21 419.67 88.98% 2021-22 547.84 91.09% 2022-23 634.46 92.06%

(V) Employment Achievement (Direct): FY 2018-19 to 2022-23

The Unit has achieved employment of 318 employees (Men-111, Women-207) in 5TH years of the 3rd block period. 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:

Name of the Unit M/s SYNTEL PVT LTD. LOA No. & Date SEZ/PUNE/26/08/2007-08/54 dt. 28.03.2008. Location of Unit Block S-1,3rd Floor, & Block S-2, Plot No. B1/B2, IT Park, Dehu-Alandi Road, MIDC Software Technology Park, Talawade, Pune-412062 Validity of LOA 05.12.2023 Item(s) of manufacture/ Services Computer Software and IT Enabled Services Date of commencement of production 06.12.2008
Execution of BLUT 21.80 Crores Outstanding Rent dues NA Labour Dues NA Validity of Lease Agreement

Pending CRA Objection, if any NA Pending Show Cause Notice/ Eviction Order/Recovery Notice/ Recovery Order issued, if any NA No. of employees as on 31.03.2022 Male 111, Female -207 Total 318 Area allotted (in sq.ft.) 88450 Sq. Ft

Area available for each employee per sq.ft. basis (area / no. of employees) 278.14 Sq. Ft. Investment till date

Building NA Plant & Machinery 42.71 Crores 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 had submitted a report vide letter dated 16.01.2024 for the FY 2018-19 to 2022-23, in the prescribed format along with point-wise reply to the discrepancies as follows: -

A. Details of year-wise export as per the prescribed format:

(a) EXPORT (Rs. in crores) Year/Per iod Figures reported in APR (FOB Value) Figures

as

per Softex/Customs Records Difference if any Reason for Difference / Remark FY 2018- 19 280.7950 284.2198 -3.4248 Reconciliaton sheet submited by the Unit is as below. FY 2019- 20 80.2767 102.3985 -22.1218 FY 2020- 21 110.5900 114.2235 -3.6335 FY 2021- 22 129.7716 114.2356 15.5360 FY 2022- 23 87.7755 87.9377 -0.1623 Reconciliaton statement (Rs. In Cr.)
Years As per APR
(A) SOFTEX fled (B) Diff. [A-B] (C) (C)

Accrual

Onsite Unit rectfcaton entry & accrual

FY 2018- 19 280.7950 284.2198 -3.4248

-3.4248 Note-1 FY 2019- 80.2767 102.3985 -22.1218

-22.1218 Note-1

20 FY 2020- 21 110.5900 114.2235 -3.6335

-3.6335 Note-1 FY 2021- 22 129.7716 114.2356 15.5360 12.4288 3.1072

Note-2 FY 2022- 23 87.7755 87.9377 -0.1623

-0.1623 Note-1 Note 1: Year 2018-19, Year 2019-20, Year 2020-21 and Year 2022-23 Softex forms are fled for full invooice amount howevoer revoenue in books is recorded after considering unit rectfcaton entry for transfer of revoenue to correct unit of the same entty. Hence revoenue to that extent is reduced for the partcular year under revoiew. Note 2: Year 2021-22 Export revoenue as shown in APR includes entry for accrual of revoenue for which SOFTEX forms are not fled as actual billing is not made. Invooices for Expense reimbursement are booked as revoenue based on chargeback invooices. This revoenue is not Export revoenue hence Softex forms are not fled for the same howevoer same is included in revoenue as per Financial Statement.

b. IMPORT: (Rs. In Cr.) Year/Peri od Figures reported in APR (CIF Value) Figures as per Customs Records Difference if any Reason

for Difference/Remark FY 2018- 19 1.3478 1.3478 0.00

FY 2019- 20 0.6700 0.6700 0.00

FY 2020- 21 1.2585 1.2585 0.00

FY 2021- 22 0.2944 0.2944 0.00

FY 2022- 23 5.8730 5.8730 0.00

(c) BLUT (Rs. In crores) 1 Value of BLUT Executed (Duty foregone) (including for CG/ Raw Material/ Servoices)

Value of Additonal BLUT executed: • Year: Date of acceptance • BLUT amount: TOTAL voalue of BLUT Executed: -

BLUT Amount - Rs 21.80 crores Date of acceptance 07/10/2019

Total Value of BLUT– Rs. 21.80 crores 2 Total Duty Foregone on goods & Servoices procured (Category-wise BLUT voalue utliied separately for Figures in Rs. crores FY 2018-19

imported and indigenous goods and servoices) This should be based on BLUT worksheet which provoides for estmated voalue and duty foregone separately for each category of procurement. Goods Imported – 0.26 Indigenous – 0.02 Servoices Imported – 0.00 Indigenous – 0.83

FY 2019-20 Goods Imported – 0.12 Indigenous – 0.04 Servoices Imported – 0.00 Indigenous – 0.71

FY 2020-21 Goods Imported – 0.33 Indigenous – 1.03 Servoices Imported – 0.00 Indigenous – 0.44

FY 2021-22 Goods Imported – 0.13 Indigenous – 0.82 Servoices Imported – 0.00 Indigenous – 5.45

FY 2022-23 Goods Imported – 1.19 Indigenous – 0.03 Servoices Imported – 0.00 Indigenous – 1.40 3 Has the Unit procured goods and or servoices without havoing sufcient balance in their BLUT? If Yes, Month & year when the BLUT was exhausted Details of the consignments and Total voalue of Goods procured without havoing sufcient or nil balance in BLUT

No (d) Employment made as on date i.e. 31.03.2023 (as on end of block period/ year upto which monitoring is being done) Total :- 318 Female: - 111 Male :- 207 (e) Details of Pending Foreign Remitance beyond Permissible period, if any (as on 31.03.2023) Nil

To cross-check the same and voerify whether necessary permission from AD Bank/ RBI has been obtained. (f) Whether all Softex has been fled for the said period. If no, details thereof. Unit informed that they havoe fled all the Softex forms. (g) Whether all Softex has been certfed, if so tll which month has the same been certfed. If not, provoide details of the Softex and reasons for pendency. Unit informed that all Softex certfed except (3 under condonaton of delay) as menton in Annexure. Unit informed that they are in process of fling delay condonaton appln. (h) Whether unit has fled any request for Cancellaton of softex No (i) Whether any Servoices provoided 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 provoided) Year in Cr. 2018-19 0.9178 2019-20 0.3392 2020-21 0.1572 2021-22 0.3778 IT Servoices rendered to DTA wherein payment receivoed in INR. In this regard Unit informed that SEZ Unit has levoied IGST on all servoices provoided in DTA and tax so collected has been paid to Govot through GSTR3B. Appears to be voiolaton of SEZ Rules. (j) SO to voerify and certfy whether the unit has updated the BLUT ledger Module in SEZ Online. Kept in abeyance as per Ofce Order No. F.No. SEEPZ/JDC PUNE/01/2022-23/2151 dated 16.03.2023 (k) Has the unit cleared any Capital Goods procured duty free in DTA against Payment of Duty, or otherwise? Full details to be provoided along with voalue of assets and duty discharged Sale of Capital Goods- E-waste – IT assets FY 2021-22 - Value Rs 0.01 cr Duty paid Rs 0.0020 cr
FY 2022-23 - Value Rs. 0.05 cr. Duty paid Rs. 0.01 cr.
(l) Is the unit sharing any of their infrastructure with other units or are utliiing 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 approvoal for sharing of common infrastructure has been obtained from UAC/DC ofce, the date of UAC/ Approvoal leter to be indicated No (m ) Whether all DSPF for servoices procured during the said monitoring period under consideraton has been fled by the unit and whether the same has been processed for approvoal by the SO Ofce. Unit informed that they are in the process of fling DSPF forms. (n) Whether unit has fled all DTA procurement w.r.t. the goods procured by them during the monitoring period for the relevoant period: Yes

If no, details thereof (o) Details of the request IDs pending for OOC in respect of DTA procurement on the date of submission of monitoring report NIL (p) Has the unit set up any cafeteria/ canteen/ food court in unit premises? If yes, whether permission from UAC/DC ofce has been issued, or otherwise Whether unit has avoailed any duty paid goods/servoices for setng up such facility? If yes, whether unit has discharged such duty/ tax beneft avoailed? details to be givoen including amount of duty/ tax recovoered or yet to be recovoered No (q) Whether any voiolaton of any of the provoisions of law has been notced/ observoed by the Specifed Ofcer during the period under monitoring No

List of SOFTEX Pending

SNo. SOFTEX RID Month & Year Amount in USD Amount in INR Reason for pendency 1142200214155 June- 2022 0.06 4.78Condonaton for delay in SOFTEX submission. Unit informed that they are in process of making applicaton. 2142300033142 Dec-2022 0.05 4.35 3142300128670 Mar -2023 0.24 19.86

f. ADC’s observations: • The Unit has achieved export revenue of Rs. 689.22 Crores as against projected export of Rs 341.95 Crores i.e. 201.55 % and has achieved
positive cumulative NFE of Rs 634.46 crores i.e. 92.06% in the 3rd Block period i.e. during the FY 2018-19 to FY 2022-23. • It is observed that the unit has provided services in DTA against the payments received in INR as detailed below: Year DTA Sale in INR Amount in Crores 2018-19 0.9178 2019-20 0.3392 2020-21 0.1572 2021-22 0.3778 Total 2.1698

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 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 for FY 2018-19 to FY 2022-23 for 3rd block period of 5 years, in terms of Rule 54 of SEZ Rules, 2006.

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