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Special Economic Zone Incentives
Apart from facilitating with state-of-the-art infrastructure and access
to a large well-trained and skilled work force, Special Economic Zone
also offers enterprises and developers with a favourable and attractive
framework of incentives. They are as follows:
- 100% exemption of income tax for a block of 5 years and an
additional 50% tax exemption for two years thereafter.
- 100% Foreign Direct Investment (FDI) in the manufacturing sector
permitted through automatic route, barring a few sectors.
- External commercial borrowings by SEZ units upto US$500 million a
year without any maturity restrictions through a recognized banking
channels.
- Facility to retain 100% foreign exchange receipts in Exchange
Earners' Foreign Currency Account.
- 100% FDI permitted to SEZ franchisee in providing basic telephone
services in SEZs.
- No cap on foreign investment for small scale sector reserved
items.
- Exemption from industrial licensing requirements for items
reserved for the SSI sector.
- No import licence requirements.
- Exemption from customs duties on import of capital goods, raw
materials, consumables, spares etc.
- Exemption from Central Excise duties on procurement of capital
goods, raw materials, consumable spares etc., from the domestic
market.
- No routine examinations by Customs for export and import cargo.
- Facility to realize and repatriate export proceeds within 12
months.
- Profits allowed to be repatriated without any dividend-balancing
requirement.
- Job work on behalf of domestic exporters for direct export
allowed.
- Subcontracting both domestic and international is permitted; this
facility is available to jewellery units as well.
- Exemption from Central Sales Tax and Service Tax.
- Facilities to set up off-shore banking units in SEZs.
Incentives to Developers
- Exemption from duties on import/ procurement of goods for the
development, operation and maintenance of SEZ.
- Income tax exemption for a block of 10 years in 15 years.
- Exemption from Service Tax
- FDI for the development of townships within SEZs with
residential, educational, health care and recreational facilities
permitted on a case-to-case basis.
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