Clarification on government notification
sukhbir singh
(Querist) 30 March 2014
This query is : Resolved
Ministry of Commerce has issued a Notification on 12th August 2013 allowing transfer of properties in SEZ as follow:
a) the unit has held a valid Letter of Approval as well as lease of land for at least a period a of five years on the date of transfer.
Question:
has held a valid LOA
At the time of Transfer
At least for a period of five years
Authority say that on the date of transfer one should have a valid Letter of Approval.
We contend that 'has held' relate to a past period and one is eligible if he has a valid letter of approval for a period of five years in the past. The eligibility of five years should have been completed at any point of time He may not have a valid LOA on the date of transfer.
Devajyoti Barman
(Expert) 30 March 2014
Post the relevant clause. The meaning is to be interpreted in broad spectrum of agreement then within the narrow meaning of a particular clause.
ajay sethi
(Expert) 30 March 2014
it would be necessary to have valid LOA for period of 5 years on date of trnasfer as contended by authority .
Rajendra K Goyal
(Expert) 30 March 2014
Relevant clause has to be posted with full facts.
sukhbir singh
(Querist) 30 March 2014
Notification Dated 12.8.2013 issued by Ministry of Commerce, Government of India amending the SEZ Rules:
Rule 74A of SEZ Rules:
Transfer of Assets by units upon their exit:- The unit may opt out of Special Economic Zone by transferring its asssets and liabilities to another person by way of transfer of ownership including sale of Special Economic Zone units subject to the following conditions:
(a) the unit has held a valid letter of approval as well as lease of land for at least a period of five years on the date of transfer.
The question is if a unit applies on say 1.4.2014 for transfer of its assets to another unit in the SEZ. On the date of transfer i.e. on 1.4.2014 unit has completed five years from 1.4.2001 to 1.4.2006 and has held a valid Letter of Approval. Or the unit has completed five years at any point of time should be eligible for sale transfer as per above notification. However, the SEZ authorities are of the view that unit should hold a valid Letter of Approval on the date of transfer i.e. whenever they apply for transfer.I mean to say that according to me the unit has held a licence for five years and it is not necessary that it should continue to have a valid letter of approval at the time of applying for transfer also. Since the unit which become long ago will not get their licence renewed also.
R.V.RAO
(Expert) 31 March 2014
yes. as on date of transfer one should have a valid LOA which he has held for a period of 5 years .
sukhbir singh
(Querist) 31 March 2014
Thanks Mr. Rao. I have a valid LOA for five years during a previous period of 2005-2010 but not now. Since a unit is closed and not working LOA may not be extended. So on the date of transfer he is not having a valid LOA but he has a valid LOA in a previous year. My contention is that I have held, emphasis, have held, a valid LOA for a period of five years. So how it is to be interpreted.
R.V.RAO
(Expert) 01 April 2014
there are 2 simultaneous conditions.
1.currently holding a valid LOA
2. has held the same for 5 years.
i feel you are not satisfying condition 1.
sukhbir singh
(Querist) 01 April 2014
Mr. Rao then the wording should be 'having' or 'holding' a valid licence and not 'has held' a valid license. I feel it is an eligibility that when i apply for transfer of unit in a SEZ I have worked there for five years and then closed but my property is there.
