Incentives to the SEZ
The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment are:-
- Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
- 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
- Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
- External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
- Exemption from Central Sales Tax.
- Exemption from Service Tax.
- Single window clearance for Central and State level approvals.
- Exemption from State sales tax and other levies as extended by the respective State Governments.
The major incentives and facilities available to SEZ developers include:-
- Exemption from customs/excise duties for development of SEZ for authorized operations approved by the BOA.
- Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
- Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
- Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
- Exemption from Central Sales Tax (CST).
- Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
Check List
- A demand draft amounting to Rs. 5000/- in favor of “Pay & Accounts Officer, Ministry of Commerce & Industry, Department of commerce” payable at New Delhi.
- Email address and website details of the company
- Complete project report– It will include the explanation on the following sections
- Introduction and history of company
- Introduction of Promoters/Intermediary and ultimate holding company
- In case of investment by Private Equity Fund/Venture Capital, note on that
- Product/Services
- Process of delivery of services
- Manpower
- Infrastructures
- Customers
- Note on marketing
- Note on other credentials and standing
- Financial highlights
- Cost of Project of the proposed SEZ Unit on fit outs and furniture, computers and other hardware, other assets and working capital
- Break up of investments in plant and machinery of the proposed SEZ Unit as under:-
- Indigenous
- Import CIF Value
- Means of financing of the investment in the project
- Note on proposes services and its delivery process
- Power and water requirement
- Note on customer and marketing tie-up
- Projected profit and loss account for the next five years
- Projected Balance sheet for the next five years
- Projected Foreign Exchange Balance Sheet as under:-
- FOB Value of exports
- Foreign Exchange outgo
- CIF Value of imported machinery
- CIF Value of other material
- Royalty
- Knowhow fees
- Payment to technicians
- IP Payment
- Dividend
- Interest
- Any other Foreign Exchange outflow
- Note on other credentials and standing of the proposed SEZ Unit
- Copy of Memorandum & Articles of Association.
- Copies of passport, PAN and IT return for last three years in respect of directors along with complete contact details
- Copies of audited financial statements for last three years along with Income Tax Returns
- Copy of Master Service Agreement with parent company
- Copy of Import-Export code
- Copy of LOI/STPI Permission for existing Unit
- Willingness/consent/LOI from the SEZ Developer regarding space, power and water.
- Group Corporate profile
- Registered Office Address along with Form 18 filed with ROC
- An Affidavit on Rs. 100/- stamp paper in the specified format
- List of capital goods with quantity and value required for the next five years
- Copy of the PAN Card of the Company
- All documents will be self attested
- Dollar conversion rate to be shown by way of foot note
Note:- Nature of the industrial undertaking like Large scale/Medium scale/Small scale are not applicable being a service provider,
