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6. What are the benefits available for companies in the SEZ Zone?
  • 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.
7. What is the approval mechanism for the units in the SEZ?
All approvals are to be given by the Unit Approval Committee headed by the Development Commissioner. Clearance from the Department of Policy and Promotion/Board of Approvals, wherever required will be obtained by the Development Commissioner. A Letter of Permission to set up an SEZ unit is issued by the DC on the unit, meeting all the criteria specified in the Application. The Application form downloaded from www.sezindia.nic.in is enclosed for reference in the Annexure.
8. What are the obligations of the Unit under the Scheme?
  • The units have to be Net Foreign Exchange Earners to get the status of an SEZ unit i.e. Exports Imports >0. For this purpose, a Legal Undertaking is required to be executed by the unit with the Development Commissioner.
  • Any company in the SEZ set up with FDI has to be incorporated under the Indian Companies Act with the Registrar of Companies for undertaking Indian operations.
  • The units have to maintain proper records of accounting. If a unit is engaged in both trading & manufacturing, separate accounting records must be maintained.
  • Annual Performance Reports must be submitted to the Development Commissioner
  • The units are also to execute a bond with the Zone Customs for their operation in the SEZ.
9. Will there be a Customs House in the SEZ?
Yes. There will be an on-site Customs House in the SEZ.
10. What is the processing area in an SEZ?
The processing area is the bonded area within the SEZ where all manufacturing, services and trading SEZ units are located.

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