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Facilities and Incentives for SEZ Enterprise
 Facilities in Special Economic Zone
A new Special Economic Zone (SEZ) scheme has been introduced in the Export & Import Policy from 1/4/2000, with a view to provide an internationally competitive and hassle free environment for export production.
 Indian SEZ - Salient Features and Facilities
  • A designated duty free enclave and to be treated as foreign territory for trade operations and duties and tariffs.
  • No licence 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.
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