The Central Government with wide notification issued on 1st May 2023 amended the Special Economic Zones (SEZ) rules exempting the Unit set up in the International Financial Service Centre.
The Central Government promulgated the following rules to further amend the Special Economic Zones Rules, 2006 in accordance with the authority granted by section 55 of the Special Economic Zones Act, 2005.
The new amendment has substituted rule 53A of Special Economic Zones Rules, 2006 which provides an exemption to the Unit setup in an International Financial Service Centre providing financial service and regulated by the International Financial Services Centres Authority from rule 53.
The notification states: “53A. Exemption.- Nothing contained in rule 53 shall apply to a Unit setup in an International Financial Service Centre providing financial service and regulated by the International Financial Services Centres Authority.”
“Financial service” and “International Financial Service Centre” had the same meanings assigned to them in Section 3(1)(e) and(g) respectively of the International Financial Services Centres Authority Act, 2019 for the purposes of this rule.
As per Section 2(1)(e), the financial service includes buying, selling, or subscribing to a financial product or agreeing to do so, acceptance of deposits, safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so, effecting contracts of insurance, exercising any right associated with a financial product or financial service…etc.
According to Section 3(1)(g), the “International Financial Services Centre” means an International Financial Services Centre set up, before or after the commencement of the International Financial Services Centres Authority Act, 2019, under section 18 of the Special Economic Zones Act, 2005.
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