The Ministry of Commerce and Industry has recently issued an instruction to clarify the monitoring and demand of additional Bond-cum-Legal Undertaking by Special Economic Zone (SEZ) units.
The instruction by Sumit Kumar Sachan, Under Secretary to Government of India stated, “I am directed to refer to representations received from EPCES and SEEPZ SEZ on the above-mentioned subject and to draw attention to the provisions of Rule 22(1)(iv)(d) of SEZ Rules, 2006, wherein it is expressly stipulated that there shall be no debit and credit in the BLUT.”
Rule 22(1)(iv)(d) of SEZ (Special Economic Zone) Rules, 2006 pertains to the procedure for the application and approval of units in the SEZ. Specifically, it states that an application for setting up a unit in the SEZ shall be made to the Development Commissioner in the specified form along with a project report containing details of the project, such as the nature of the project, the proposed activities, the estimated investment, the proposed employment, and the infrastructure facilities required.
The rule further specifies that the project report shall also contain a statement of Bond-cum-Legal Undertaking (BLUT) indicating the steps proposed to be taken by the unit to fulfil its obligation under the Industrial Disputes Act, 1947 (14 of 1947), the Minimum Wages Act, 1948 (11 of 1948), the Contract Labour (Regulation and Abolition) Act, 1970 (37 of 1970), the Payment of Gratuity Act, 1972 (39 of 1972), the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Employees’ State Insurance Act, 1948 (34 of 1948), the Child Labour (Prohibition and Regulation) Act, 1986 (61 of 1986), and such other laws as may be applicable to such unit.
In essence, this rule outlines the requirements for submitting an application to establish a unit in an SEZ and the details that must be included in the project report, particularly with regard to the unit’s obligations under various labour laws.
“Besides, the BLUT amount shall be monitored quarterly or yearly on the basis of the Quarterly Progress Report or Annual Progress Report submitted by the Developer or Unit, as the case may be and in case of any shortfall in the BLUT amount, a fresh or additional Bond-cum-Legal Undertaking shall be furnished”, it was further stated.
“In view of the above, it is clarified that the need for additional BLUT would arise only in cases where the scale of operations has increased from the initial levels for which the BLUT was submitted and additional BLUT should not be sought in a routine manner as long as the unit/developer operates at the same scale of activities as initially envisaged”, the instruction conclusively clarified.
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