FinMin seeks public comments on framework of finance SEZs

The move comes at a time when the finance ministry and the RBI are already finalising the modalities for operationalisation of similar services at the Gujarat International Finance Tec (GIFT) City. Laying out a three phase implementation plan for finance SEZ, the report has said that the finance ministry must issue a set of capital control regulations, under FEMA 1999, which give Finance SEZs the identical status vis-a-vis the Indian economy as is the case for Hong Kong vis-a-vis the Chinese economy.

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Further, the Finance Bill 2015 must have a provision with residence-based taxation for all activities by non-residents in finance SEZs. In the second phase, the finance ministry must enact a full finance SEZ ACT while in the third phase, it can enforce the full institutional infrastructure required for an IFC.

“India requires sophisticated financial services to fuel growth in the future,” said the NIPFP report, adding that the country also has an opportunity to produce these financial services as there is no IFC in India day time, people in the country have requisite skill sets and also due to the vast hinterland economy.