Advisory / Regulatory Support
- Preparation of proposal documentation (preparation of application in Form A for SEZ developer etc.)
- Preparation of preliminary SEZ documentation for setting up units (application in form F, preparation of project report, business forecast etc.)
- Application for Import Export Code Number to the Directorate General of Foreign Trade.
- Obtaining the letter of permission /renewal of LOP
- Obtaining permissions for movement and transfer of capital goods within the units
- Obtaining permission for disposal of waste and scrap
- Application for approval of enhancement in production capacity
- Permission for change in location of unit/additional location
- Assistance in obtaining requisite certification for obtaining service tax exemption and refund (Form A1, A2, A3 and A4)
- Assistance in claiming exemption/refund for entry tax, sales tax and VAT on all purchases (excluding petroleum products) from DTA.
- Assistance in obtaining exemption on stamp duty and registration charges
- Assistance in Exit procedures for an SEZ Unit
- Execution of BLUT & other necessary formalities
- Filing of returns (half yearly and annual) with SEZ/Central Excise and Service Tax /Commercial Tax Authorities
- Structuring of contracts/transactions to optimize indirect tax incidence
- Formulating indirect tax efficient business models
- Conducting VAT impact assessment studies
- Undertaking comprehensive reviews of business operations
- Advice on classification, valuation, applicability of taxes on transactions and admissibility to tax benefits/exemptions
- Identification of innovative tax planning opportunities
- Single point contact and centralized coordination for tax payments, compilation of documents
- Filing of SEZ Monthly Reports
- Filing of SEZ Performance Reports
- Filing of QPRs & APRs
- Filing of Softex forms
- Renewal of Units Regularization Contract
- Renewal of BLUT
Drafting appeals and submissions
- Appearances and arguments before adjudication and appellate authorities
- Briefing Senior Counsel on need basis
- Representation before relevant Government authorities
- Heading to be changed to: Appeals & Submissions
Frequently Asked Questions
What is a Special Economic Zone?
How can one apply for setting up of SEZs?
Any person, who intends to set up a Special Economic Zone, may after identifying the area make a proposal in Form A to either State Government concerned or Board of Approval.
15 copies of application, indicating name and address of the applicant, status of the promoter along with a project report covering the following particulars may be submitted to the Chief Secretary of the State:
- Location of the proposed Zone with details of existing infrastructure and that proposed to be established;
- Its area, distance from the nearest sea port / airport / rail / road head etc.
- Financial details, including investment proposed, mode of financing and viability of the project.
- Details of foreign equity and repatriation of dividends etc., if any
- Whether the Zone will allow only certain specific industries or will be a multi-product Zone.
The State Government shall, forward it along with their commitment to the following to the Department of Commerce, Government of India:
- That area incorporated in the proposed Special Economic Zone is free from environmental restrictions;
- That water, electricity and other services would be provided as required;
- That the units would be given full exemption in electricity duty and tax on sale of electricity for self-generated and purchased power;
- To allow generation, transmission and distribution of power within SEZ;
- To exempt from State sales tax, octroi, mandi tax, turnover tax and any other duty/cess or levies on the supply of goods from Domestic Tariff Area to SEZ units;
- That for units inside the Zone, the powers under the Industrial Disputes Act and other related labour Acts would be delegated to the Development Commissioner and that the units will be declared as a Public Utility Service under Industrial Disputes Act.
- That single point clearances system and minimum inspections requirement under State Laws/Rules would be provided.
The proposal incorporating the commitments of the State Government will be considered by an Inter-Ministerial Committee in the Department of Commerce. On acceptance of the proposal, a letter of permission will be issued to the applicant.
Are there any terms & conditions for setting up of SEZ?
- Only units approved under SEZ scheme would be permitted to be located in SEZ.
- The SEZ units shall abide by local laws, rules, regulations or bye-laws in regard to area planning, sewerage disposal, pollution control and the like. They shall also comply with industrial and labour laws as may be locally applicable.
- Such SEZ shall make security arrangements to fulfill all the requirements of the laws, rules and procedures applicable to such SEZ.
- The SEZ should have a minimum area of 1000 hectares and at least 25 % of the area is to be earmarked for developing industrial area for setting up of units.
- Minimum area of 1000 hectares will not be applicable to product specific and port/airport based SEZs.
- Wherever the SEZs are landlocked, an Inland Container Depot (ICD) will be an integral part of SEZs.
- Detailed guidelines on setting up of SEZ in the Private/Joint/State Sector is given in Appendix 14-II.N of Handbook of Procedures Volume I.
What is role of State Governments?
What are the facilities Incentive/ Facilities to SEZ Developer ?
- Exemption from customs/excise duties for development of SEZs 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).
How to set up a unit in SEZ?
What is the approval mechanism for the units?
What is the obligation for the unit in SEZ?
- SEZ units have to achieve positive net foreign exchange earned over five years i.e. Exports (FOB value of all exports) - Imports (CIF value of all imports) > 0. Please see Clause 53 of Chapter VI of the SEZ Rules, 2006 for a more detailed explanation
- For this purpose, a Legal Undertaking is required to be executed by the unit with the Development Commissioner
- Any company 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
- Annual Performance Reports must be submitted to the Development Commissioner
- The units are also to execute a bond with the zone Customs for their operations in the SEZ
What are the incentive/facilities available for SEZ units?
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.
- 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.
Are SEZs exempted from Labour laws ?
What are the facilities for Domestic suppliers to Special Economic Zone?
Supplies from Domestic Tariff Area (DTA) to SEZ to be treated as physical export. DTA supplier would be entitled to:
- CST Exemption
- Exemption from State Levies
- Discharge of EP if any on the suppliers
Who monitor the functioning of the units in SEZ?
Are SEZ's controlled by Government?
If one buy goods from DTA should they require to pay State Sales Tax and Excise?
What is the practical role of Development Commissioner?
How about examination of goods by customs?
What are the provisions relating to External Commercial Borrowing (ECB) in SEZ?
Will it be possible to supply to other units in SEZ?
Who is responsible for the maintenance of a SEZ?
Is it possible for EXIT of SEZ Units?
To learn more SEZ Registration view video
To learn more New Company Registration in Dubai view video