Ø Any private/public/joint sector or State Government or its agencies can set up SEZ.
Ø SEZ should have a minimum area of 1000 hectared and at least 25% of the area is to be earmarked for developing industrial area for setting up of units.
Ø 15 copies of application to be submitted to the State Government and the State Government will forward it to Department of Commerce.
Ø SEZ is duty free enclave and is deemed to be foreign territory for the purposes of trade operations and duties and tariffs. Goods and services going to the SEZ area from DTA are to be treated as exports and goods coming from the SEZ area into DTA are treated as if these are being imported.
Ø SEZ units may be set up for manufacture of goods and rendering of services.
Ø SEZ unit to be positive net foreign exchange earner within three years.
Ø Duty free goods to be utilized in 5 years.
Ø No routine examination by Customs of export and import cargo.
Ø No Separate documentation required for customs and Foreign Trade Policy.
Ø Full exemption in electricity duty and tax on sale of electricity for self generated and purchased power.
Ø Exemption from state sales tax, octroi, mandi tax, turnover tax and any other duty/cess or levies on the supply of goods from Domestic Tariff Area to SEZ Units.
Ø Support services like banking, post office, clearing agents. etc. provided in Zone Complex.
Ø 100% FDI permitted for townships with residential educational and recreational facilities on a cases to case basis.
Ø Income Tax benefit under 801A to developers for any block of 10 years in 15 years as per the choice of the developer.
Ø Duty free import/domestic procurement of goods for development, operation and maintenance of SEZs.
Ø Exemption from service tax.
Ø Income of infrastructure capital fund/company from investment in SEZ exempt from Income Tax.
Ø Investment made by individuals etc. in a SEZ company also eligible for exemption u/s 88 of Income Tax Act.
Ø For setting up a manufacturing, trading or service units in SEZ, 3 copies of project proposal in the format prescribed at Appendix 14-1A of the Handbook of Procedures Vol.1 to be submitted to the development Commissioner of SEZ.
FACILITIES TO SEZ ENTERPRISES:
Ø SEZ units may import or procure from the domestic sources, duty free, all their requirements of capital goods, raw materials, consumables, spears, package materials, office equipment, DG sets etc. for implementation of their project in the Zone without any license or specific approval.
Ø Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units.
Ø Goods imported/ procured locally duty free could be utilized over the approval period 5 years.
Ø Domestic sales by SEZ units be exempted from SAD.
INCOME TAX
Ø 100% Income-Tax exemption (10A) for first 5 years and 50% for 2 years
thereafter and not exceeding 50% of ploughed back profit for next 3 years.
FOREIGN DIRECT INVESTMENT:
Ø 100% foreign direct investment is freely allowed in manufacturing sector
in SEZ units under automatic route, except arms and ammunition, explosive, atomic substance, narcotics and hazardous chemicals, distillation and brewing of alcoholic drinks and cigarettes, cigars and manufactured tobacco substitutes.
Ø No cap on foreign investments for SSI reserved items.
OFF-SHORE BANKING (OBUs)
Ø Setting up of Off-Shore Banking Units allowed in SEZs.
Ø OBUs entitled for 100% Income-Tax exemption for 3 years & 50% for next 2 years.
BANKING/EXTERNAL COMMERCIAL BORROWINGS
Ø External commercial borrowings by units up to $ 500 million a year
allowed without any maturity restrictions.
Ø Freedom to bring in export proceeds without any time limit.
Ø Flexibility to keep 100% of export proceeds in EEFC account. Freedom
to make overseas investment from it.
Ø Commodity hedging permitted.
Ø Exemption from interest rate surcharge on import finance.
Ø SEZ units allowed to ‘write-off’ unrealized export bills.
Ø Exemption from interest rate surcharge on import finance.
CENTRAL SALES TAX ACT:
Ø Exemption to sales made from Domestic Tariff Area to SEZ units.
SERVICE TAX:
Ø Exemption from Service Tax to SEZ units.
ENVIRONMENT:
Ø SEZs permitted to have non-polluting industries in IT, and recreational facilities like golf courses, desalination plants, hotels and non-polluting service industries in the Coastal Regulation Zone area.
Ø Exemption from public hearing under Environment Impact Assessment Notification.
COMPANIES ACT:
Ø Enhanced limit of Rs. 2.4 crores per annum allowed for managerial remuneration.
Ø Regional office of Register of Companies in SEZs.
Ø Exemption from requirement of domicile in India
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