The government has eased rules for units in Special Economic Zones (SEZs) involved in reconditioning, repair and re-engineering services allowing them to sell waste metal in the domestic market after paying import duty.
SEZ Rules allow import of items for repair and refurbishments subject to the condition that all the units that enter the country get exported. The scrap and other metal waste that is generated in the process also has to be exported.
The handling of waste was creating problems for units in SEZs involved in repair and refurbishment as the costs of finding a market for that waste metal and shipping it abroad was proving to be a big burden, a source said.
With changes in rules notified on Thursday, the waste metal can now be sold in the Domestic Tariff Area on payment of applicable customs duty and this shall be treated as import. The sale will be permitted only to the actual user or to the trader for use of the actual users authorised by the State Pollution Control Board on a one-time basis, the notification by the Ministry of Commerce and Industry said.
Only non-hazardous metal and metal-alloy wastes in metallic non-dispersible form having no contaminants will be eligible for this relaxation.
A few SEZ involved in reconditioning, repair and re-modelling heavy machinery had been seeking this relaxation and would benefit from the notification.
The government has provided relaxation in SEZ rules wherever it has eased the burden of the units in these zones, it is also looking at changes in the SEZ Act itself to benefit over 270 SEZs that are operational.
The relaxation could come in the form of easier access to the domestic market by the units in the zones that were set up to promote exports. The changes in the law could be attempted in the budget session of Parliament.
Already 34% of the output of SEZs get sold in the domestic market after payment of import duties and other taxes. In FY 24 exports from SEZs were $ 157.3 billion up 1% on year. Goods exports from the zones grew 2% on year to $ 63 billion while services exports were flat at $ 94.3 billion.