Incentives to the SEZ

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

  • 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,

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