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Faqs

11. What is the non-processing area in an SEZ?
The NPA is the area outside the bonded area within the SEZ where residential, commercial and recreational development is located.
12. Are all industries permitted in an SEZ?
All types of industries can be located in an SEZ with the appropriate approvals and clearances from the Pollution Control Board.
13. Can units operate both in the Domestic Tariff Area (DTA) and SEZ areas?
A company can set up units both in the SEZ and DTA provided separate accounting procedures are maintained.
14. Can SEZ units supply goods in the local market?
Yes. SEZ units can sell goods and services including rejects and scraps or products arising during the manufacturing process in the Domestic Market on payment of customs duties and applicable excise duties. This is subject to their achieving positive net foreign exchange earnings and fulfilling the conditions necessary on FOREX. These sales are considered as imports in the DTA and are subject to import duties, countervailing, anti-dumping and safeguard duties as applicable. The components of tax are as follows:-

  • Basic customs duty + safeguard duties if applicable + CVD payable on goods removed for clearance to DTA.
  • Valuation is as per date of removal and when date is not ascertainable, date of payment of duty.
  • The DTA buyer to file Bill of Entry for Home consumption
  • No additional duty of customs tariff if goods cleared to DTA are not exempt from Sales tax or value added tax imposed by State Government.
  • SEZ unit can supply goods against advance authorization. The supplier will be entitled to benefits of deemed exports.
  • Supply in DTA against special entitlement of duty free imports goods. The manufacturer as well as trader can supply duty free import of goods against special entitlement. It will be counted towards fulfillment of NFE, as in case of EOU units
  • Basic customs duty + countervailing + anti-dumping and safeguard duties as applicable.
  • SEZ unit can supply goods against advance authorisaton. The supplier will be entitled to benefits of deemed exports.
  • Supply in DTA against special entitlement of duty free imports goods. The manufacturer as well as trader can supply duty free import of goods against special entitlement. It will be counted towards fulfillment of NFE, as in case of EOU units.
15. What are the tax implications/exemptions on supplies from DTA to SEZ?
  • Goods imported into SEZ by developer or unit in SEZ are exempt from customs duty.
  • Any services provided in a SEZ or to a unit in SEZ are exempt from customs duty.
  • Goods brought from DTA to SEZ are exempt from excise duty.
  • Taxable services provided to a developer or unit in SEZ are exempt from service tax. The services must be provided only within the zone.
  • Exemption from CST or Central Sales Tax to dealers in India supplying goods to unit in SEZ .Units in SEZ are required to furnish declaration in prescribed form to Indian manufacturer.
  • A unit in an SEZ can obtain goods from registered dealer outside the zone without payment of CST. SEZ unit has to submit original I form to the assessing authority.

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