The Commerce Ministry has asked development commissioners of SEZs to consider requests of developers of these special economic zones for installation of solar power panels under the existing SEZ guidelines for power generation, transmission and distribution norms.

In a communication to the Development Commissioners (DCs) of all special economic zones (SEZs), the Department of Commerce said that various requests have been received from EPCES (Export Promotion Council for EOUs and SEZs) as well as SEZ developers for installation of solar power panels as capital goods in these zones for solar power generation for captive use.

"The matter has been examined in consultation with DGEP, CBIC. Accordingly, the DCs are requested to consider such requests from developers/co-developers" under the power guidelines issued on February 16, 2016 by the department, the communication said.

The Directorate General of Export Promotion (DGEP) is an extended arm of Central Board of Indirect Taxes and Customs (CBIC).

Under those guidelines, a power plant, including non-conventional energy power plant, to be set up by developer/co-developer in an SEZ as part of an infrastructure facility will be in the non-processing area of the SEZ only.

It will be entitled to fiscal benefits only for its initial setting up and no fiscal benefit would be admissible for its operation and maintenance. Such a power plant can supply power to DTA (domestic tariff area) after meeting the power requirement of the SEZ subject to payment of customs duty. SEZs are key export hubs which contributed over one-third of the country's total outbound shipments in the last fiscal. These zones are enclosures that are treated as foreign territories for trade and customs duties, with restrictions on duty-free sales outside these zones in the domestic market.