Indian Special Economic Zone (SEZ) - Salient Features and Facilities

Saturday, September 9, 2006

» A designated duty free enclave and to be treated as foreign territory for trade operations and duties and tariffs.

» No license required for import.

» Exemption from customs duty on import of capital goods, raw materials, consumables, spares etc.

» Exemption from Central Excise duty on procurement of capital goods, raw materials, consumable spares etc. from the domestic market.

» Supplies from DTA to SEZ units treated as deemed exports.

» Reimbursement of Central Sales Tax paid on domestic purchases.

»100% income tax exemption for a block of five years,50% tax exemptions for two years and upto 50% of the Profits ploughed back for next 3 years under section 10-A of Income tax Act.

»Supplies from DTA to SEZ to be treated as exports under 80HHC of the IT Act.

»carry forward of losses

»100% Income-tax exemption for 3 years & 50% for 2 years under section 80-LA of the Income-tax Act for off-shore banking units.

» Reimbursement of duty paid on furnace oil, procured from domestic oil companies to SEZ units as per the rate of Drawback notified by the Directorate General of Foreign Trade.

» SEZ units may be for manufacturing, trading or service activity.

» SEZ unit to be positive net foreign exchange earner within three years.

» Performance of the units to be monitored by a Committee headed by Development Commissioner and consisting of Customs.

» 100% Foreign Direct Investment in manufacturing, sector allowed through automatic route barring a few sectors.

» Facility to retain 100% foreign exchange receipts in EEFC Account.

» Facility to realize and repatriate export proceeds within 12 months.

» Re-export imported goods found defective, goods imported from foreign suppliers on loan basis etc. without G.R. Waiver under intimation to the Development Commissioner.

» "Write-off" of unrealised export bills upto 5%.

» Commodity hedging by SEZ units permitted

» Capitilization of import payables

» No cap on foreign investment for SSI reserved items.

» Exemption from industrial licensing requirement for items reserved for SSI sector.

» Profits allowed to be repatriated freely without any dividend balancing requirement.

» Domestic Sales on full duty subject to import policy in force.

» No fixed wastage norms.

» Full freedom for subcontracting including subcontracting abroad.

» Subcontracting facility available to jewellery units

» Duty free goods to be utilized in 5 years.

» Job work on behalf of domestic exporters for direct export allowed.

» No routine examination by Customs of export and import cargo.

» No separate documentation required for customs and Exim Policy.

» In house customs Clearance.

» Support services like banking, post office clearing agents etc. provided in Zone Complex.

» Developed plots and ready to use built up space

» Exemption from Custom/Excise Duty on goods for setting up units in the zone.

For details please see chapter 7 of Export and Import Policy and chapter 7 Handbook of Procedure.

Source: Department of Commerce

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NIIR PROJECT CONSULTANCY SERVICES (NPCS) is a reliable name in the industrial world for offering integrated technical consultancy services. Its various services are: Pre-feasibility study, New Project Identification, Project Feasibility and Market Study, Identification of Profitable Industrial Project Opportunities, Preparation of Project Profiles and Pre-Investment and Pre-Feasibility Studies, Market Surveys and Studies, Preparation of Techno-Economic Feasibility Reports, Identification and Selection of Plant and Machinery, Manufacturing Process and or Equipment required, General Guidance, Technical and Commercial Counseling for setting up new industrial projects and industry.

NPCS also publishes varies technology books, directory, databases, detailed project reports, market survey reports on various industries and profit making business. Besides being used by manufacturers, industrialists and entrepreneurs, our publications are also used by Indian and overseas professionals including project engineers, information services bureau, consultants and consultancy firms as one of the input in their research.

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