SEZ Benefits(SEIS/MEIS)

SEZ
  • Question : What are the salient features of SEZ scheme?

    Answer: The salient features of the Special Economic Zone scheme are:- 

    • A designated duty free enclave to be treated as a territory outside the customs territory of India for the purpose of authorized operations in the Special Economic Zone;
    • No license required for import;
    • Manufacturing or service activities allowed;
    • The Units are only required to achieve Positive Net Foreign Exchange to be calculated cumulatively for a period of five years from the commencement of production;
    • Domestic sales subject to full customs duty and import policy in force;
    • Full freedom for subcontracting;
    • No routine examination by customs authorities of export/import cargo;
    •  Special Economic Zone Developers /Co-Developers and Units enjoy Direct Tax and Indirect Tax benefits as prescribed in the Special Economic Zone’s Act, 2005.
  • Question : What are the major incentives and facilities available to Special Economic Zone developers?

    Answer : The major incentives and facilities available to Special Economic Zone developers are as under:

    Benefit of MEIS/SEIS is also available to Special Economic Zone units

    Exemption from customs/excise duties for development of SEZs for authorized operations approved by the Bank Of America.

  • Income Tax exemption on income derived from the business of development of the Special Economic Zone in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act. (Sunset Clause for Developers has become effective from 01.04.2017)
    • Exemption from Central Sales Tax (CST).
    • Exemption from Service Tax (Section 7, 26 and Second Schedule of the Special Economic Zone Act).
    • Supplies to Special Economic Zone are zero rated under IGST Act, 2017.
  • Question: What are the incentives and facilities offered to the units in SEZs for attracting investments into the Special Economic Zones, including foreign investment ?

    Answer: The incentives and facilities offered to the units in SEZs for attracting investments into the Special Economic Zones, including foreign investment include:

    • Duty free import/domestic procurement of goods for development, operation and maintenance of Special Economic Zone units
    • 100% Income Tax exemption on export income for Special Economic Zone 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. (Sunset Clause for Units will become effective from 01.04.2020)
    • Exemption from Central Sales Tax, Exemption from Service Tax and Exemption from State sales tax. These have now subsumed into GST and supplies to Special Economic Zones are zero rated under IGST Act, 2017. 
    • Other levies as imposed by the respective State Governments.  
    • Single window clearance for Central and State level approvals.
    • Supplies to Special Economic Zone are zero rated under IGST Act, 2017.

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