NEW DELHI: Units in the special economic zones (SEZs) importing used clothes for certain activities will have to ensure with proper certificates that the consignments are free of toxic or hazardous substances.
In case of mis-declaration by the unit who is importing the product regarding the materials being free from such substances, action would be taken as per the Foreign Trade (Development & Regulation) Act, 1992, the Commerce Ministry said.
This condition is the part of the policy which the ministry has framed to regulate functioning of worn and used clothing units in SEZs.
"Each consignment of used clothing imported by unit shall be accompanied with a certificate from the exporter/agency in which it was generated regarding dis-infection and fumigation of the containers from an agency licensed in the state of origin of worn clothing with import documents," the policy said.
It said that the SEZ units should also fulfil export obligations while shipping products made out of the imported clothes.
"To ensure that used clothing units in SEZ fulfil their export obligations...all such units would be required to ensure that certain minimum percentage of the unit's annual turnover is physically exported out of the country," it added.
It said that the sales to domestic tariff area (DTA) of un-mutilated clothing on account of export surplus or export rejects will not exceed 15 per cent of the physical export turnover of the unit.
"Before the clearance of the used clothes to DTA, all imported consignments of such used clothes shall be subject to 100 per cent scrutiny at the premises of the unit by SEZ authorities," the policy said.
DTA means the area out of the SEZ unit or the domestic market.
"All applicable laws, rules and regulations pertaining to environmental and other areas...shall be strictly complied with by all units in SEZs carrying on recycling of used clothing," the policy added.
The tax free zones have emerged as a major route for attracting investments and increasing exports. SEZs contributed about 30 per cent to the country's overall exports.
The total exports from SEZ up to June 30 stood at Rs 1.13 lakh crore and the investment stood at Rs 2,60,252 crore and over 11.35 lakh persons were employed in the sector.