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Sez – Special Economic Zones

A Special Economic Zone (SEZ) is a geographical zone inside a Nation-State where a separate legal framework allows for more liberal economic policies and governance structures than in the rest of the country. The SEZ Act declared the geographical regions specified as being outside of India’s normal Customs domain.

 

If you want to take advantage of the benefits of setting up a business in a SEZ but aren’t sure about all of the legal requirements or processes, you should contact the professionals at KKCA Firm. We are one of India’s most reputable SEZ Registration Consultants. All types of businesses can benefit from our outstanding SEZ services. We are your best choice for a quick and painless Special Economic Zone Registration. If you’re thinking of starting a new business, why not consider a special economic zone (SEZ)?

In India, who has the authority to create Special Economic Zones (SEZs)?

A special economic zone (SEZ) can be formed jointly or individually by the federal government, a state government or its agencies, or the private sector, including a foreign business, for the aim of promoting economic development, producing goods or providing services, or a Free Trade and Warehousing Zone (FTWZ).

Is there a minimum size requirement for establishing a special economic zone (SEZ)?

The SEZ Rules outline the minimum land area necessary for a SEZ to be established.

A minimum of 500 hectares of land is required for multi-product SEZs and 50 hectares of land is required for single-product SEZs. However, there is no minimum area requirement for IT SEZs; instead, a minimum built-up area of 100,000 square metres is required for the top seven cities, 50,000 square metres for the next fifteen cities, and 25,000 square metres for the other cities.

Approval Criteria

Proposals for establishing up a SEZ in the public, private, joint, or state sector must fulfill the following criteria;

  • The SEZ should be at least 1000 hectares in size. It would not, however, apply to current EPZs that are converting to SEZs as such, or to notifying additional land as part of a SEZ, or to product-specific port/airport-based SEZs.
  • In terms of area design, sewage disposal, pollution control, etc., the SEZ and the units in it must follow local laws, rules, regulations, or bylaws. They should also follow all applicable industrial and labor laws, as well as any other relevant laws, rules, and regulations.
  • Such SEZ should make sufficient provisions to meet the requirements of applicable laws, regulations, and procedures.
  • Only units that have been sanctioned under the SEZ plans are allowed to be built in these zones.
  • At least 25% of the SEZ must be used to create industrial areas for the establishment of such entities.

The SEZ Rules provide for:

  • Simplified processes for developing, operating, and maintaining Special Economic Zones, as well as for establishing units and managing operations in SEZs;
  • For the purpose of establishing a SEZ, a single window clearance is required.
  • Setting up a unit in a Special Economic Zone requires only one window of approval;
  • Clearance through a single point of contact for both the federal and state governments;
  • Compliance procedures and paperwork have been simplified, with an emphasis on self-certification.
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These are some of the primary incentives and facilities available to SEZ developers

  • Exemption from customs and excise charges for such construction of SEZs of BOA-approved activities. Capital goods, raw materials, consumables, spares, and other items purchased from the domestic market are exempt from Central Excise tax.
  • Section 80-IAB of the Income Tax Act provides an income tax exemption on money generated from the SEZ development activity for a period of 10 years in 15 years.
  • Under section 10AA of the Income Tax Act, a person is entitled to a 100% income tax exemption for a period of five years, followed by a 50% tax exemption for the next five years.
  • Losses should be carried forward.
  • For offshore banking units, section 80LA of the Income Tax Act provides a 100% income tax exemption for 5 years and a 50% income tax exemption for 5 years.
  • Section 115 JB of the Income Tax Act exempts you from paying the minimal alternate tax.
  • Section 115O of the Income Tax Act exempts dividend distributions from taxation.
  • Exemption from the sales tax levied by the Central Government (CST).
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